After announcing less-than-favorable second quarter results, Actions Semiconductor Ltd. said it has taken action to refocus on its tablet business and restructure its subsidiaries in an effort to cut losses and grow market share.
The fables semiconductor company reported revenue for the second quarter of 2014 as $12.0 million, slightly more than the $11.3 million in revenue in the first quarter and far below the $18.5 million reported in the second quarter of last year.
Dr. Zhenyu Zhou, CEO of Actions, said in a statement the loss in the second quarter was the result of what he claims is an unforeseen slowdown in the tablet market plus the addition of fierce competition “with formidable players rapidly carving market shares in the white box tablet market and putting downward pressure on selling prices.”
Considering Actions derives a significant portion of its revenues from tablet chip sales and the company switched its primary focus from portable media players (PMPs) to tablets getting this business back on track is priority one for the China-based company, said Hsiang-Wei Lee, chairman of Actions, in a statement released on the company’s Web site.
Lee said that after rapid growth in 2012 and 2013, competition has driven prices so low that now Actions is seeing China-branded 7-inch tablets retailing for below $50. “In order for [Actions] to maintain or increase our market share, we have to call on all of our internal R&D resources and potentially enter into strategic alliances to expand our sales channels, gain additional technical know-how and license our technologies to more developers in order to foster the continuing adoption of our platform,” Lee said.
Because of this, Actions is undertaking a number of internal initiatives to keep up with the ever-changing tablet market.
One of these initiatives is retracting the sales and research center subsidiaries Actions has established throughout China and streamline them into one central reporting structure. This includes re-designating several sales and research entities back under the banner of the principal operating entity: Actions.
“We believe a more streamlined reporting line will provide our engineers with greater clarity of their goals and responsibilities as well as foster a more collaborative environment for engineers in different departments,” Lee said.
Another initiative the company is taking is to turn to strategic partnerships for growth possibly including opening up its product development and intellectual property portfolio, which Actions hope will bring packaged license deals, joint ventures and other strategic alliance opportunities. While Actions said partnerships has always been a strategic focus – it recently collaborated with Intel and Rockchip – it appears given the state of the company, it may be more open to the possibilities. Lee said that it is not, however, seeking a horizontal merger with a direct competitor at this time. But it looks like this option may be on the table to non-direct competitors as Actions has also formed a new special committee to look into possible merger options.