HTC Faces Internal Strife

HTC's problems continue to increase. Several key employees have left the company in recent weeks in the face of low morale, and the HTC First is being called a "disaster."

HTC's chief product officer, Kouji Kodera, left the company last week, according to a report from The Verge. Kodera's main responsibility was to oversee HTC's product strategy. It's odd timing, considering that HTC launched both the One and the First smartphones in the last month. The One is the company's flagship device for the year, and HTC's comeback bid is pinned to the device's success.

Kodera's departure was followed this week by Jason Gordon, HTC's vice president of global communications. A few other employees have left recently, too, including director of digital marketing John Starkweather, product strategy manager Eric Lin, and global retail marketing manager Rebecca Rowland. Perhaps the most telling insight about these departures is that many of them come from the marketing department, an area in which HTC is trailing the competition badly.

[ Users are indifferent to HTC's Facebook phone. Read AT&T Reportedly Dropping HTC Facebook Phone. ]

Some of the blame for the employee exodus is being placed at the feet of Ben Ho, HTC's new chief marketing officer. Ho came aboard in late 2012 and has been slowly moving some of the company's product planning and strategy functions from its Seattle offices back to Taipei. Ben Ho was the HTC employee who badmouthed the Samsung Galaxy S 4 when Samsung launched the device in New York in April, calling it "more of the same." Ho isn't the only reason HTC's marketing team is facing low morale, however.

The HTC First, also known as the Facebook phone, is seen by many as a complete failure. The phone was announced by Facebook and HTC at an event in April. The device was the first to ship with Facebook's Facebook Home launcher. Apparently HTC expected to have an exclusive with Facebook Home on the First for an unspecified period of time. Instead, Facebook changed its plans and offered the Facebook Home software to other Android devices as a download from the Google Play Store the same week the First launched. The device went on sale for $99 (sold by AT&T), but the price was quickly dropped to just 99 cents following lackluster initial sales.

It didn't help that HTC ran into production problems with the One, its most important device of the year, which dampened the supply of the phone at launch. HTC is only now getting the device to its customers in significant volumes. Further, despite strong reviews, the One hasn't been selling well against the onslaught of Samsung's Galaxy S 4, which may reach 10 million units shipped as soon as this week.

Though morale may be down, the company is not without hope. It is turning around its financials after hitting rock bottom late last year. If sales of the One pick up, it will further help HTC's bottom line -- and perhaps its morale. The company desperately needs to improve both.

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