HTC Said to Plan Smartwatch as Wang Rallies Workers

HTC Said to Plan Android Smartwatch With Camera for Next Year
A man uses a mobile device as he walks past an HTC Corp. retail store in Taipei, Taiwan. Photographer: Jerome Favre/Bloomberg

HTC Corp. is developing a smartwatch that uses Google Inc.’s Android software and can take pictures, according to a person familiar with the matter.

Cost, functions and sales strategy for the watch are still to be decided before it’s released by the second half of 2014, said the person, who asked not to be identified because the plans aren’t public. Chairwoman Cher Wang gathered workers at a town-hall style meeting today to tell them the Taiwanese smartphone maker needs to improve its customer focus, Chief Marketing Officer Ben Ho said in an interview.

Dwindling market share for HTC smartphones led to the company’s first quarterly loss and a 54 percent slump in its share price this year as it loses ground to Samsung Electronics Co., the world’s biggest producer. The smartwatch will join a growing segment of wearable technology that already includes devices from Samsung and Sony Corp.

Apple Inc. has a team of designers working on a watch-like device, two people familiar with the matter said in February, and the company has sought trademark protection for the “iWatch” name in Japan.

Retail sales of Internet-connected wearable devices, including watches and eyeglasses, will reach $19 billion by 2018, compared with $1.4 billion this year, Juniper Research said in an Oct. 15 report.

HTC rose by the daily limit in Taipei trading, surging 6.9 percent to close at NT$139.50. Taiwan’s benchmark Taiex index was little-changed and has advanced 9.3 percent this year.

Faster Reaction

HTC doesn’t comment on rumors or speculation, it said in an e-mailed response to questions about the smartwatch from Bloomberg News.

Wang, who was joined by Chief Executive Officer Peter Chou, held a 90 minute town hall meeting with workers, including a question and answer session, Ho said.

Wang emphasized the importance of after-sales service to ensure customer loyalty and repeat business for its handsets, according to Ho.

Chou, who took over as president in 2004, has struggled to compete with devices from Apple, Samsung and an array of Chinese entrants driving prices down.

HTC, once the biggest seller of smartphones in the U.S., saw its share of the global market drop by more than half in the second quarter. The company has issued redesigned versions of its flagship HTC One model and has hired actor Robert Downey Jr. in a renewed push to promote its brand.

HTC’s third-quarter net loss was NT$2.97 billion ($101 million), it reported Oct. 4, wider than the NT$1.71 billion loss according to the average of 16 analysts’ estimates compiled by Bloomberg. Sales of NT$47 billion missed the NT$54 billion average of analysts’ estimates.

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