I would like to take this opportunity to share with you the situation and my thought regarding recent progress and challenges of htc.
You had probably heard of our announcement of q3 outlook which is definitely disappointing. Yes, of course we are disappointed that our sales are down while smartphone market share is growing.
I think there are multiple reasons for the challenges we are facing today.
The franchised Brands are playing a major role today. Htc has not built a franchised brand until HTC One. It requires sometime to build a successful brand. HTC One is a very strong product which is well recognized. However the mass awareness was not big enough. While building HTC one franchised Brand is the right direction, we still need to continue to improve the awareness of the Brand and drive greater consumer demand and preference.
There are multiple areas we need to be improving. Traditionally htc depended on products a lot. We have leading products and they have helped us in the market to get to where we are today.
However when market changed, competitors strategies changed and when they became better the product gap became narrower. Our competitors can leverage their scale, brand awareness and big marketing budget to do things which htc could not do.
There are always room for us to be improving, e.g. products, quality, holistics readiness of product, marketing, sales, retail, etc. We have identified those areas and have plans to improve them. We have recently optimized some organization to ensure that we have new way of working on them. To ensure we can focus on making our big ideas bigger. To ensure our holistic readiness is there when we go to market.
We also need to improve our communication. Htc used to be a company where we did things quick and reacted quick. However the fast growth from the last 2 years has slowed us down. We have people in meeting and talking all the time but without decision, strategic direction or sense of urgency. Bureaucracy crept in without clear ownership. We agreed to do something but we either didn't do it or executed it loosely.
That's what happened to us. Market changed and we also have our own issues.
However I have strong confidence in HTC. Our origin and culture are still there. We have great people and they are still there very committed to htc. We have the best products as recognized by the One X having the industry's best rating. In addition, our product pipeline is very strong and I am super excited about the new products we are working on for later this year and early next year. Htc's design, innovation and technologies are one of the tops in the world. We have excellent customer relationship which is invaluable. We have reacted quick in fixing our major issues. We are coming back soon; we are one of the top three worldwide major smartphone brands with tremendous respect from the industry.
I want to take this opportunity to thank you and your family as well for their support to you and to htc. I want to thank you for your hard work and contribution. You are the people who make me feel very proud of HTC.
You have every reason to remain confident. Do not be influenced by noises from market and industry. We really are the strong player in the market and we are just having short term challenges. But short term challenges are fine. We are still very strong and financially healthy. The most important thing is what we do to solve the problem. Our own action matters. The way we behave matters. Please make sure that we kill bureaucracy. Make sure we are doing the right thing quick and make it works. We communicate with clear goals and targets and make it happen.
For example, after meeting we say we want to prioritize to achieve A,B,C and we want to get this done within one week. If there is concern and conflict we should immediately talk and agree upon the goals and target. We need to prevent that yeh, yeh we are looking into that, we are working on that without clear target. Of course you can say I need 2 days to confirm it and that's fine. But make sure you confirm it within the next 2 days. When we are working on something we need to have a clear sense of what the most important items and hero features are, and make sure we have high confidence to get those priorities done instead of everything is everything. Don't let the processes, rules and norms to impact our important goals. Of course we have to follow certain rules and criteria but don't let small things kill the major goals. Again make sure we have big things in mind. Stay firm with the hero innovations and make them even bigger and deliver them.