HTC posts a record 79 per cent profit drop

by Mark Tyson on 8 October 2012, 10:45

Tags: HTC (TPE:2498), PC

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HTC’s third quarter net income has dropped 79 per cent. In a statement today the company said net income for Q3 was NT$3.9 billion (£82 million). Bloomberg analyst estimates show that investors had been expecting a figure of around NT$4.43 billion (£94 million), significantly more than what has materialised. This time last year, HTC’s Q3 income was a much more impressive NT$ 18.68 billion (£396 million).

Samsung and Apple continue to gain in the smartphone markets, squeezing HTC out from the profitable higher end. Samsung’s popular range of Galaxy phones is very wide and these also combat HTC’s efforts in the mid and low price smartphone markets. At the very bottom of the smartphone market we have much stronger competition emerging from Chinese “white box” smartphones.

Kevin Chang, an analyst at Citigroup told Bloomberg that during Q4 “HTC is likely facing further share loss in the U.S. and Europe”. He added “While HTC was doing well in China in the third quarter, we believe the dramatic price declines and performance improvements of whitebox smartphones have dampened HTC’s momentum in China.”

Looking at the future of HTC, we already know about the Windows Phone 8 handsets and the HTC One+. Dennis Chan of Yuanta Securities said to Reuters “The new models we saw in the past few weeks are not going to change the game. It will be able to keep its market share, but we won't see much pick-up.” An analyst from Goldman Sachs said that he would like to see flagship models contributing more to the income of the company in the future. Therefore HTC is in desperate need of a hit upmarket model in 2013.

We reported on Friday the contrasting fortunes of Samsung, which set a new record for operating profits in Q3. Samsung’s profit figures in Q3 2012 quarter are nearly double those in Q3 2011. Also Apple’s new iPhone 5 model has done very well at the top end of the smartphone market, selling an impressive 5 million units in its first weekend of sales. We had an article on HEXUS just a month ago with analysts saying HTC’s fortunes won’t be reinvigorated by Windows Phone 8 and its “me too” designs.



HEXUS Forums :: 9 Comments

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I think a lot of people have bad memories of early HTC Android phones with HTC Sense, and now they're upgrading they're choosing a different manufacturer. I went from HTC (Hero) to Samsung (SII) last year, for example. HTC need to get some real consumer interest behind a flagship model, so they'll get the same sales that Samsung did with the SII and SIII.
I have a desire HD which is now 2 years old and its worked for the whole time, but its not without slow downs, glitches and issues. I've borrowed my wifes Galaxy S (testing three's signal at work) today which is the same age and I am amazed how quick it is and stable compared to my Desire HD.

Galaxy S3 on order…. Fed up with waiting for Nokia - and not convinced anymore the 920 will be that good or windows 8.
I have had HTC phones / phonePDAs ever since my Orange SPV (yes I was ahead of the smartphone trend, it makes me laugh when people look at how amazing the Galaxy Note with S-Pen is, didnt I have a T-Mobile MDA with Stylus yonks ago?!)

However what I think has been most dissapointing is not HTC Sense itself, but the fact that the phone having HTC Sense means that upgrades take forever, or don't arrive at all. Definitely considering another manufacturer after my Desire-Z contract finishes. Its a shame though, the original Desire seemed like such a success and its just been blown away by the Galaxy range.
Can't help but feel a little sorry for HTC on this. They were market leading for android based smartphones, but have just been blown out of the water by Samsung in the last two years.

I've had 2 HTC phones both of which were great at their time. I now have a Galaxy Note and that's in a different league. I love the thing.
Brewster0101
I have a desire HD which is now 2 years old and its worked for the whole time, but its not without slow downs, glitches and issues.

Put this on it: http://forum.xda-developers.com/showthread.php?t=1778202