HTC Suffers Another Bad Quarter- Profits Down 83%

[AMG_Roadster]

Really hate to see this. Even if you are a huge Samsung fan you should be sorry to see HTC continue to struggle. Competition in this space is good for everyone.

HTC has just put out unaudited results for its Q2, with profits down 83% on last year. The Taiwanese phone maker, which is battling for oxygen in the fiercely competitive Android OEM smartphone space dominated by South Korea?s Samsung, said its total revenues for the quarter reached NT$70.7 billion ($2.35 billion). Profits came in at NT$1.25 billion ($41.63 million), below analyst expectations, with earnings per share after tax standing at NT$1.50.

HTC?s Q2 profits were higher than the NT$85 million it made in the previous quarter but down from NT$7.40 billion it made a year earlier. The WSJ reports that the average expected net profit of seven analysts it polled for HTC?s Q2 was NT$2.0 billion, making for another sizeable miss for HTC.

The latest results put a dampener on some more positives signs last month. HTC?s sales in May surged 48.03% ? its best uplift all year ? but monthly revenues for June took a considerable dive, down 23.88% month-on-month and 26.43% year-on-year. That?s a worrying sign for the company which has been banking on its flagship HTC One handset keeping the tills ringing as it works to expand its portfolio, reconfigure its senior management team and reboot its marketing strategy.

The problem HTC faces is extremely fierce competition in the smartphone space, with rivals like Samsung wielding a huge portfolio of devices at multiple price-points taking more and more share of the market. HTC has announced a smaller, more affordable version of the HTC One ? the HTC One Mini ? which it will be hoping can grab share from the likes of the Samsung Galaxy S4 Mini but the One Mini has yet to hit shelves. Trying to turn around a phone business with just one star handset up for grabs is a huge ask.

A Google Play edition of the HTC One is due to go on sale next week, albeit alongside a Google Play edition of Samsung?s Galaxy S4.

HTC Suffers Another Bad Quarter, With Profits Down 83% In Its Q2 | TechCrunch

 

[Habiib]

After reading this article, I asked myself some simple questions. Was HTC suppose to make more profit than Q2 2012? Is HTC operating at a loss? Is HTC in any type of financial distress as of the time of this article? Are HTCs profits for 2013 trending up or down? Are their profits compared to 2012 trending up or down? Finally, according to HTC's own projections, were their profit results accurate? What's going to happen Q3 and Q4 when anticipated devices from other manufacturers reach the market..

Posted via Android Central App

 

[ahaxton]

When we think about HTC's results, lets keep in mind one thing: the HTC First. They took a BATH on that thing.

 

[HalizDad]

When we think about HTC's results, lets keep in mind one thing: the HTC First. They took a BATH on that thing.

I can't believe they got zuckered into making that thing. Facebook isn't THAT important. Hell, I don't even have an account other than in name, just so nobody else used my name. I do the same thing with all the free email providers, too.

 

[LavallavaL]

"The One" is an insane device, and it probably also chewed profits by being very expensive to manufacture, that aluminum casing has to be expensive to produce. My guess is that they may have made a bold move on "The one" to get the HTC name back into the game, hoping that the temporary financial loss would prevent them from falling into oblivion. Ericsson, and Nokia both fell into insignificance because they did not try to get a real top tier device out when they started to flounder, they didn't have the guts to take a temporary loss, and payed dearly for that lack of guts. I believe HTC's management chose to make a gamble, get a premium phone, even with a dismal profitability, figuring the could surf the wave of "greatness" after with cheaper, more profitable devices.

HTC needed to make sure Carriers put them at the forefront of their offerings, and it worked. Big names have fallen because they did not generate enough buzz for Carriers to want them in their line-ups. Nokia and Ericsson, both powerhouses at one time, fell into oblivion by favoring short-term revenues over a temporary lower profitability; They both chose to offer lesser devices and keep their precious margins ratios, and eventually fell off the map because of it.

I think HTC made the right move. The current position they hold offers promise and opportunity, whereas companies that have faced similar situations, and chose the "safe route", fell out of favor with carriers and never came back. For example, Sony's current Xperia line-up is extremely well made, yet they are barely heard of. Carriers are ignoring the Brand... To them, it's still Ericsson, a brand for which they have little sympathy.. Ericsson was bought out by Sony last year, handset features and quality has risen dramatically in the last few years, and yet, carriers still ignore the brand. This, I think, shows just how hard-nosed and difficult carriers can be to convince, and how much power the wield over the industry. Even I, an "average joe consumer" got a Sony handset, not by choice, but because I was forced to choose it due constraining circumstances. I never thought I would keep it very long, nor did I expect to end up with such a fantastic device.

This brings back a memory; Lee Iacocca's "In business, you either lead, follow, or get out of the way"... I think HTC took a lesson there, and it may very well pay off in the next few years. Time will tell, but I think HTC just managed to save itself from oblivion. Strategically, spreading resources too thin to be all over the place is no better than a single, unified offensive, if said offensive is well planned and executed. Samsung may be all over the market right now, but, they are spreading themselves thin for market share, and that can also be costly. Samsung got *****-slapped in the markets lately and analysts all over are getting worried because they are spreading too thin.

What if HTC's strategy is to have one phone, and, as it evolves, keep the older model on the market instead of developing a different handset ? There's substantial cost saving in such a tactic. The caveat is that you need to have an "Uber device", a real top-tier item when you make a release, but it can be done. Apple certainly benefited from that very strategy...

 

[Mr.Willie]

They still made a profit. What I don't understand is people's fascination with the S4. Did Samsung sign a deal with the devil or something ?

 

[Weaser999]

I'd imagine the removable battery and expandable storage are big selling features for Samsung. Maybe people are prefering utility over looks?

 

[LavallavaL]

They still made a profit.

Market investors are not interested in profits, they are interested in profit growth. Profit growth is the share value engine, and share investments pay off with the same scenario as everything else: Buy low, sell high.

 

[AMG_Roadster]

They still made a profit. What I don't understand is people's fascination with the S4. Did Samsung sign a deal with the devil or something ?

Samsung had a big marketing blitz and built up a lot of hype before the device was released.

 

[Mr.Willie]

I'd imagine the removable battery and expandable storage are big selling features for Samsung. Maybe people are prefering utility over looks?

I prefer to have a proper amount of storage to begin with. I like not having to manage SD cards.

Market investors are not interested in profits, they are interested in profit growth. Profit growth is the share value engine, and share investments pay off with the same scenario as everything else: Buy low, sell high.

Yea I understand that. But as long as they are operating in the black they should be good. I haven't bought stock in HTC, not yet anyway.

Samsung had a big marketing blitz and built up a lot of hype before the device was released.

But IMO it's a let down. Of course, that's just my opinion...

 

[JHBThree]

I'd imagine the removable battery and expandable storage are big selling features for Samsung. Maybe people are prefering utility over looks?

Nope.

Sent from my SGH-M919 using Tapatalk 2

 

[Johnny Roberts]

I prefer to have a proper amount of storage to begin with. I like not having to manage SD cards.



Yea I understand that. But as long as they are operating in the black they should be good. I haven't bought stock in HTC, not yet anyway.



But IMO it's a let down. Of course, that's just my opinion...

That's the problem, it's a minority opinion.

 

[shoii]

They still made a profit. What I don't understand is people's fascination with the S4. Did Samsung sign a deal with the devil or something ?

Lol you're the same guy bashing the S4 on apple forums.

GS4 Love

 

[Mark Zagotti]

I am on my second EVO and was really looking at a Galaxy phone. I like the look and the feel of the EVO LTE? I think both HTC and Samsung make good quality devices. My tablet is a Samsung and my phone HTC. I believe in trying out different manufacturers. For my Apple fix, I have my ipod touch. Just my opinion.

Sent from my GT-P6210 using AC Forums mobile app

 

[AdamsHouseCat]

I'd imagine the removable battery and expandable storage are big selling features for Samsung. Maybe people are prefering utility over looks?

Samsungs financial performance is also in the news- and not in a good way. Are you still liking that S4 "below all smartphone average" dim display?

 

[shoii]

Samsungs financial performance is also in the news- and not in a good way. Are you still liking that S4 "below average" screen brightness?

Lol that's your argument? So intimidating

GS4 Love

 

[AdamsHouseCat]

Lol that's your argument? So intimidating

GS4 Love

Both of my statements are factually correct.

 

[Paul627g]

Please remain civil folks. Better to ignore and walk away than continue a downward trend.

Thanks

Paul
Forums Moderator


Sent from my Nexus 7 using AC Forums mobile app

 

[Johnny Roberts]

Samsungs financial performance is also in the news- and not in a good way. Are you still liking that S4 "below all smartphone average" dim display?

If you mean the 5' gorgeous display with rich deep blacks, I love it! The HTC One also has a awesome display, so there is no need to play that game.

 

[AdamsHouseCat]

If you mean the 5' gorgeous display with rich deep blacks, I love it! The HTC One also has a awesome display, so there is no need to play that game.

My apologies. My original post in this thread was a specific retort to a specific troll post. It was meant for an audience of one, but obviously that is never the case here.