HTC posts record drop in profits, no signs of a revival

Taiwanese smartphone manufacturer HTC today announced its quarterly results and they did not bring good news for the company investors, as the company posted a record 79 per cent drop in quarterly profit.

Just giving you a quick break up of numbers, you can always find the full results at the HTC website:

  • HTC’s third-quarter net income slumped to NT$3.9 billion
  • Third-quarter revenue fell 48 percent to NT$70.2 billion
  • Unaudited operating income was NT$4.9 billion,
  • Net income before tax was NT$4.0 billion,
  • Unaudited earnings per share after tax were NT$4.70 based on 831,227 thousand weighted average number of shares.

But why?

Apart from One X, I haven’t seen a cracker of a smartphone in the last two years from HTC. Company has launched some decent devices but in the current market conditions decent devices do not work. On the other hand, company competitor Samsung had launched four big devices and several other more than decent phones: Galaxy S II – a huge hit, Samsung Galaxy S III – an even bigger hit, Samsung Galaxy Note – a new device segment and a decent hit and Note II has just arrived.

Company needs to innovate and innovate fast, bring two really great smartphones every year and plus several more than decent smartphones for every budget.

How can HTC expect to One V or Desire V to compete with Samsung Galaxy S Advance or Xperia sola, Xperia U, when every single phone of the three outperforms both of the HTC mid-range devices and this is just an example.

Another reason, poor marketing – where are your marketing folks HTC? I might have seen some marketing efforts for One X, although those efforts too seem invisible, rest there is no or very little effort for other devices. If consumers won’t know about your devices, how are they going to buy them?

HTC might not have become a Nokia or RIM, but they are very well on that path. The company needs some real introspection.


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