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Last week, Google released its first Pixel phones. The next day, Bloomberg posted a critique with the title of ” HTC, you loser”. In the article, the author says that the brand has become for Google what Foxconn is to Apple since HTC is responsible of assembling the Pixel (Culpan 2016). It is not surprised how the author jumps to this conclusion. In the last 2000s, HTC rise from an anonymous contract manufacturer to a global smartphone brand. I once had a HTC phone and I really liked it because of it is not really expensive for its quality. However, over the years, the market share of the company collapsed, and now it is barely surviving in the smartphone industry. After hitting a high of 10.7% of market share , HTC struggled to differentiate itself from its competitors. Five years have passed, Apple and Samsung are dominating the high-end smartphone market while Hawaii and other Chinese brands lead the mid- to low-end price point of phones. HTC is now stuck in an awkward middle. The stock price of the company also went from NT$ 736 to NT$ 94.58 . It even started doing contract work for Google. But, is it really the end of HTC?

Accepting its failures on smartphones and smartwatches, the company decided to focus on another technology: virtual reality, a much less competitive market. Earlier this year, in partnership with Valve, the company introduced their first VR product, HTC Vive. The product has received mostly positive reviews and the company is confident that this would the future cash cow. However, is it really the case?

VR headset industry is not as mature as mobile phone industry and has only has a few players. The characteristics of these players are somehow similar to smartphone market. For instance, Sony is like Apple, it has its own system and make it new products compatible to the existing product line. For example, PlayStation VR can only work with PlayStation 4. Oculus, which is now acquired by Facebook, benefit from the social media giant’s big company name. Both companies aim for providing VR products for high-end market. On the other hand, Samsung and Google are currently focusing on mobile virtual reality technology, it will not be surprised to see both companies launching a PC VR headset soon though.

Comparing to the above mentioned companies, HTC, which is currently worth around 2 million dollars only, does not have huge marketing budget to spend. This was one of the major causes of its failure in mobile industry. The company would be a cost-effective marketing strategy in order to stay competitive.

Nevertheless, HTC Vive is currently the most expensive VR headset in the market because of its higher quality. It price is almost 200 dollars than Oculus Rift. However, the difference in quality is not helping HTC to keep its 60% of market share(Lang 2016). Valve’s Steam survey shows that HTC Vive’s market share has declined by 6% from May to August in 2016.

Another potential risk of HTC is its partnership with Valve. The Steam service offered by Valve is also compatible with competitors’ headsets, thus cannot be counted as a competitive advantage. Value’s Steam survey actually shows that number of Oculus Rift CV1 headsets reportedly in use on Steam has almost completely halted the market share growth of the HTC Vive (Lang 2016). This could be a dangerous sign for HTC as it can be replaced easily. Not mentioning there are some games are only exclusive to Oculus Rift.

The relationship Valve and HTC has now is similar to the partnership HTC and Google has in mobile phone industry. Using Android system, HTC is in a price war with other Android manufacturers since there are so many and easy to be replaced. HTC lost its major market share because it failed to differentiate itself when the new comers entered the market. The same situation could happen in the VR market if HTC does not take action now.

In conclusion, I think HTC can keep its market share in VR headset market for a while, but the company has to be to consciously innovative and stays unique in order to keep its market leader position. Entering the VR industry seems to be a good decision now, but  HTC still has a long way to go before regaining its old glory. What do you think?

Bibliography

http://www.forbes.com/sites/ralphjennings/2016/04/19/why-people-still-prefer-samsung-after-10-fold-leap-for-htc-smartphones/#38cad6984d57

https://www.bloomberg.com/gadfly/articles/2016-10-05/htc-you-loser

http://www.roadtovr.com/oculus-rift-growth-spurt-has-halted-htc-vive-market-share-growth/

https://www.google.nl/webhp?sourceid=chrome-instant&ion=1&espv=2&ie=UTF-8#q=%E8%82%A1%E5%83%B9+HTC

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“Huh? The ATMs have a future?” This question might cross your mind when your read the title.

 

Comparing to the rest of the world, European countries are rapidly moving toward to a cashless society. An increase in the use of debt or credit and the introductions of different digital payment system make cashless possible. Sweden, for example, is on track to become the world’s first cashless society. cash transactions made up barely 2% of the value of all payments in the country in 2015 and 96% of the population has a least one debit card. (Ray, 2015) The need of ATMs has thus significantly and rapidly decreased. Between 2010 and 2012 alone, 900 cash machines were removed. (Jones, 2016) Similarity, in the Netherlands, the share of noncash payments of total value of consumer payments is about 85%! (Ray, 2015) Also, by 2018, 60% of Dutch retail payments are assumed to be cashless. (Betaalvereniging Nederland, 2015) It simply seems that there is no future for ATMs and they are soon to be gone, but It does!

 

Even though the amount of ATMs will definitely decrease over the years, I do think that there is still a need of having ATMs in the next 10 years, especially since many banks are reducing their branch numbers due to the increased use online banking. People would need ATMs to get cash. Although this occasion would probably not happen often, the need is still there and need to be fulfilled unless no store accept cash anymore. New functions are also now added to ATMs in order to replace bank branch and increase usability of the machines. For example, new UBS machines in Switzerland enable people to open bank accounts; instead of cash, they spit out a brand new debit card. Other functions such as loan payment, credit card payment ,and branch-like level of customer service are also can be found in some banks’ ATMs. The most important ATM innovation is however, the allowance of cardless access. Consumers can either use the bank’s app on their phone, or through a mobile wallet. Using the app, customers obtain a temporary PIN, then they enter it on ATM to withdraw money. This would prevent identity thefts, and thus strongly improve the security of ATMs. The use of biometric authentication system is another way to enable cardless access. For example, I  can withdraw money from my Taiwanese bank’s ATMs with my finger thanks to vein pattern recognition technology.

Besides adding more bank functions and increasing security, the ATMs industry is continuously innovating. Michael Lee, the CEO of the ATM Industry Association, stated that the game changer of ATMs is most likely to be robotics. Quantum Systems, a system that is definitely just an ATM, can also serve as bank teller services, safe-deposit box, vending machine and insurance office with the help of robotic arm. It is still too costly to realize this system, but Lee thinks it will be available in 2020s.

I think ATMs will still be around in the next few years since our need to grab some cash isn’t fading away easily anytime soon. Also, the upgraded ATMs can do not only withdrawing cash, but also most of the work of a bank branch, thus increase the importance and usability of ATMs.

 

 

Bibliography

https://letstalkpayments.com/which-countries-are-close-to-a-cashless-world/

http://www.thedrum.com/opinion/2016/08/25/how-far-away-are-we-cashless-society

http://www.atmmarketplace.com/articles/2016-in-the-atm-industry-for-europe-a-year-of-heavy-lifting/

https://www.betaalvereniging.nl/wp-uploads/2016/07/Annual-Report-Dutch-Payments-Association-2015.pdf

What is the future of the ATM in a world of digital money?