HTC posts record low profit after delayed HTC One launch

HTC posts record low profit after delayed HTC One launch

Summary: Following the delayed launch of the HTC One, the Taiwan-based smartphone maker missed revenue targets as a result. Profits hit record low levels for the sixth quarter in a row.

TOPICS: HTC, Smartphones

Taiwan's biggest maker of smartphones continues to quietly sink, after its latest quarterly earnings report shows grim reading for investors.

Following the delay of the highly anticipated HTC One — its flagship device for the year, set to take on Samsung's Galaxy S4 — the company's profits suffered record low levels and missed revenue forecasts.

HTC's unaudited net profit was T$85 million ($2.82m) during its January-March quarter, compared to T$1 billion ($33.2m) during the fourth quarter, and down from T$10.9 billion ($3.63bn) in the same quarter a year ago. 

Meanwhile, first quarter revenue was T$42.8 billion ($1.42bn), far lower than the expected range of T$50-60 billion ($1.66-1.99bn) that the smartphone maker forecast in its February outlook. By comparison, revenue was T$60 billion ($2bn) during the October-December quarter.

According to Bloomberg, a shortage of camera components forced the smartphone maker into holding off its release in key markets, such as the U.S. and the EU by upwards of a month. Analysts are not expecting a full revenue bounce-back as the HTC smartphone hits the store shelves just a few days before the new Galaxy S4 does.

In all, the HTC One launched in only three markets out of about 80 it was planned to launch in, according to Reuters.

Last week, HTC announced its First smartphone, a device that comes with the new Facebook Home software, that features the social network on its home screen. 

Topics: HTC, Smartphones

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  • Too much charity

    Verizon Droid DNA
    Sprint EVO
    Facebook phone
    Resources pulled to help other brands but not their own.
    • I would disagree...

      The fact HTC is still profitable is nothing short of a miracle. To me, HTC while being run over by Samsung and Apple, is still an amazingly well run company from many aspects. They have seen not just a shrinking share of sales but shrinking sales (but so have companies like Motorola, BB and Sony) in a growing market. Unlike the rest of their competition, however, HTC has been able to continue to post a profit. They post a profit, even if slim, without posting a loss. This is impressive and very important.

      Once a handset maker grows weak (as in posting a loss) carriers and handset distributers around the world descend like sharks with the smell of blood. They use this as incentive to get better deals: "We will offer you prime space but we want a better profit cut." The stronger the handset maker, the weaker the position of the carrier or distributer. This puts Apple, and to a lesser degree, Samsung in very strong bargaining positions. This puts companies like Sony, Google (with Motorola) and HTC in a very weak position and put in the position of having to loose brand recognition as you indicated to simply survive.

      NOTE: Once any handset maker has posted a profit, the longest one has survived in the market (as an independent company that did not go bankrupt or be purchased) is about 3 years. Once a handset maker posts a loss, they are on borrowed time.

      This works with suppliers as well as we have seen with the HTC One. An amazing phone (the first Android handset I would consider actually buying) with attention to detail no other Android handset has shown. It is being blocked to market by suppliers.

      But HTC is still posting a profit. Nothing short of amazing.