HTC: The sales mojo is gone as it falls behind Android curve

HTC: The sales mojo is gone as it falls behind Android curve

Summary: HTC cuts its sales outlook for the second time in the fourth quarter as it falls behind in the Android race.

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HTC has cut its fourth quarter revenue outlook and said sales will be flat with a year ago, or NT$104 billion ($3.4 billion). Analysts had been looking for sales of NT$130 billion.

In other words, HTC, which already disappointed with its revenue outlook just a few weeks ago, is seeing its business crater as it struggles to compete with not only Apple, but Android rivals such as Samsung and Motorola Mobility. HTC last month projected sales of NT$125 billion to NT$135 billion.

These HTC phones aren't selling.

As previously reported, HTC is facing a lot of headwinds for 2012. It looks like those headwinds have already arrived courtesy of a bevy of smartphone launches this quarter.  HTC is an interesting squeeze as Samsung moves to establish itself as the alpha Android partner. Also see: HTC: Challenges going into 2012 mount as Q4 unit outlook weakens

In a statement, HTC said:

Due to global macro economic downturn and market competition, the assumptions of 2011 Q4 financial forecast provided earlier are no longer applicable. HTC expects 2011 Q4 revenue to be approximately the same as Q4 last year. Despite 2011 Q4 revenue is not what we expected, HTC has strong confidence in its products and operation. We expect that growth will return in 2012 H1.

Of course, the big question revolves around what HTC has in the pipeline to juice growth. HTC's lineup at the Consumer Electronics Show will be closely watched. If its new product portfolio disappoints HTC will be in major trouble.

In a research note, Macquarie analyst Daniel Chang said:

We believe HTC needs to find a way to penetrate the mid- to low- end market and drive volume while regaining its technological leadership at the high end. Unfortunately, HTC seems uncompetitive at both yet – at the high end, its peers adopted AMOLED and Android 4.0 OS earlier than HTC, and at the low end, HTC is unwilling to be price aggressive due to a higher cost structure. We think it may take another 2-3 quarters to prove.

Chang is worth listening too---he called HTC's latest troubles.

Separately, HTC said it is re-evaluating the purchase of S3. HTC paid $300 million for S3 largely so it could have patents to combat Apple. Apple won an International Trade Commission ruling that may render the purchase of S3 moot. HTC said in a statement:

HTC is disappointed at the outcome of the recent ITC ruling that stated Apple did not infringe S3 Graphics' patents. S3 Graphics will continue to appeal. HTC has made significant effort in preparing for these complicated legal proceedings, including a complete legal investigation and comprehensive report on patent and price evaluations. HTC had decided to acquire S3 Graphics based on the strong belief that evidences of patent infringement from Apple were clear and ITC ruled in its initial determination that Apple had infringed two patents from S3. In light of recent development, HTC will work closely in good faith with VIA Technologies and WTI Investment International.

See: CNET: HTC may back out of S3 buy after legal defeat

Related:

Topics: Enterprise Software, Banking, HTC

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49 comments
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  • RE: HTC: The sales mojo is gone as it falls behind Android curve

    All three articles related to this HTC stories has a photo attached showing the Windows Phone OS when the articles are all about HTC & Android. You're feeding my conspiracy theory that the tech media is against Microsoft and Windows Phone.
    VintageComputerGuy
    • RE: HTC: The sales mojo is gone as it falls behind Android curve

      @VintageComputerGuy <br> -- deleted--
      Ram U
      • RE: HTC: The sales mojo is gone as it falls behind Android curve

        @Rama.NET Um, it's still there. Or was your comment deleted..? Eh, I dunno.
        VintageComputerGuy
    • RE: HTC: The sales mojo is gone as it falls behind Android curve

      @VintageComputerGuy
      Joke, I suppose. What company with such a small market share in the smart phones market gets that much coverage?
      somereader
  • Due to a garbled subspace transmission

    We are severly overstocked. Everything must go.
    HollywoodDog
  • RE: HTC: The sales mojo is gone as it falls behind Android curve

    HTC tried to ride the Android wave to expand from contract manufacturing, to becoming a consumer electronics provider. CE, and the marketing to go with it may just not be HTC's strength. And when Samsung can fund their own phone assembly lines with the major parts for less than they sell them to HTC, I don't see how HTC can compete across the board with Samsung. No one even knew who HTC was until they started shipping their Sprint Evo 4G Android phone.
    mgw@...
    • RE: HTC: The sales mojo is gone as it falls behind Android curve

      @mgw@...

      Agreed, the HTC EVO 4G seems to be HTC's 15 minutes of fame. My wife and a friend have the HTC 4G Shift, and both of them just think the phone is okay and not great. My wife might even try one of the free iPhones next time our contract comes up...
      DonRupertBitByte
      • RE: HTC: The sales mojo is gone as it falls behind Android curve

        @DonRupertBitByte

        Yeah my wife has a HTC Evo Shift and hates it. Now she either wants a Windows Phone (if Sprint has something cooler then the Arrive) or an iPhone when her contract expires.
        Shmythey
      • RE: HTC: The sales mojo is gone as it falls behind Android curve

        @DonRupertBitByte
        Yes, EVO Shift is a scam, it was an outdated phone when it came out, and its worse than original EVO. HTC is a great company, and I will pick them over samsung any day... I guess we can see how right advertisement can change things...
        corwin1681
  • RE: HTC: The sales mojo is gone as it falls behind Android curve

    Was not Android the os to grow all handset manufactures for years to come?
    It would appear that is has much to do about the hardware, and not so much the os itself.
    John Zern
    • RE: HTC: The sales mojo is gone as it falls behind Android curve

      @John Zern
      +1
      Ram U
    • An astute observation

      @John Zern
      +1
      :|
      Tim Cook
    • I've seen many smartphones in the last two years...

      @John Zern ... but I've never seen anyone using a Microsoft phone. Walmart (#1 in the Fortune 500), doesn't even advertise them in their color circulars. Only a page with 9 phones, only Android, on AT&T, Sprint and Verizon. Walmart is the best of the best and how can Microsoft hope to succeed if Walmart won't even consider them while Androids are selling like hotcakes?
      Joe.Smetona
      • RE: HTC: The sales mojo is gone as it falls behind Android curve

        @Joe.Smetona
        Well, do more electronics mean a higher risk of getting pepper sprayed?
        hoaxoner
      • I am curious.:What did your comment have to do with the article in any way?

        @Joe.Smetona
        Mr. Zern pointed out that sales of phones appear to be tied more towards
        the hardware, and not so much the os itself, as with Android runnig on so many phones, it would be logical to assume that all phones would sell equally.

        All you did was use this article to comment on Microsoft, a company you obviously hate (based on all your prior posts).

        So please tell us if Android iswhat makes the phone what it is, why are HTC's Android phones not selling well.

        Or are your talents confined only to that of midless trolling?
        :|
        Tim Cook
      • RE: HTC: The sales mojo is gone as it falls behind Android curve

        @Joe.Smetona <br><br>I'd pit my Samsung Focus S screen against any HTC turd you could even hope to produce, any day. Unless, of course, you have no understanding of black levels. Oh, and just when exactly has the prevailing 'popular' vote been correct when placed against the actual best technology? Nevermind, you consider "Walmart" quality as the best of the best. You do know YOU said that, not me, right?<br><br>You also know that McDonalds sells more hamburgers than In-And-Out. Ask anyone which they'd rather have.
        TechNickle
  • RE: HTC: The sales mojo is gone as it falls behind Android curve

    It's hard to differentiate a product when everyone and their grandmother is making one. HTC needs to figure out a niche for their products and settle for a sliver of the market instead of the whole pie.
    PilaA
  • RE: HTC: The sales mojo is gone as it falls behind Android curve

    Gotta kinda wonder if the ITC rules sides with Apple on Dec 6 against HTC and their Android offerings how long HTC is going to struggle to stay in that boat.

    I understand the Windows mobile folks may be looking for more phone manufacturers.
    pdq
    • RE: HTC: The sales mojo is gone as it falls behind Android curve

      @pdq Not "Windows mobile", "Windows Phone" is what you mean.

      Windows Mobile = OLD
      Windows Phone = NEW, hot, smooth, AWESOME
      VintageComputerGuy
      • RE: HTC: The sales mojo is gone as it falls behind Android curve

        @VintageComputerGuy
        Actually, they are all Windows Phone. What was once called "Windows Mobile" is now called "Windows Phone Classic."

        Furthermore, as a WP7.5 user (Sprint Arrive) I will happily acknowledge that there is much to like about it, but let's be honest, it is simply feature *starved* compared to Android.
        x I'm tc