What if HTC and Xiaomi merged?

HTC’s revenue has dropped 55% year-on-year accoding to its latest financial results. The company situation is worrisome, and its smartphone business has been unable to reverse that fact. Every single model released in the last few years hasn’t had the warm welcome other HTC devices had in the previous years.

But HTC is far from dead. The HTC Vive seems to prove that, and it’s clear that virtual reality –and wearables– is now a possible last resort now that their phones are fighting with irrelevance and, above all, with the ones from Apple, Xiaomi, Lenovo and Huawei.

Xiaomi is doing quite well, though: it’s soaring in wearables and the recent launch of Xiaomi Mi 5 marks an interesting milestone that will allow them to compete in the high end (with almost mainstream prices).

HTC’s smartphone business isn’t working, and Xiaomi smartphone business is limited by its international expansion, something that HTC could provide.

What would happen if these two companies merged? Current HTC market cap is $81.94B, while Xiaomi has a market valuation of $45B. One could benefit from the other: HTC would be able to take advantage of Xiaomi’s strengths and ditch its own smartphones (or combine them with the best from its partner), while Xiaomi would be able to expand globally faster.

Is this nonsense?

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