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HTC's scapegoat for profit plunge is the iPhone 4S

It's largely the fault of Apple, Inc.'s (AAPLhot-selling iPhone 4S.  That was HTC Corp. (TPE:2498) chief executive Peter Chou’s response, according to the Associated Press, when he was asked to explain why his company had plunged 35 percent in revenue and 70 percent in profit on a year-to-year basis.

Mid-2011, prior to the launch of the iPhone 4S, HTC was reportedly America's top-selling smartphone manufacturer.  But despite Mr Chou's perspective, HTC's problems do not appear to be caused by Apple alone.  After all, rival Android smartphone manufacturer Samsung Electronics Comp., Ltd. (KS:005930) also passed it, on its way to becoming the de facto leader of the Android world.

HTC's problems seem to be a mix of strong performance by competitors (Samsung, Apple), weak handset offerings from HTC, user interface bloat, and poor management.   HTC has fired its CFO and CEO Chou promises to "rearchitect our organization."

The Taiwanese phonemaker vows to stop cutting corners and "to achieve what we have wanted to deliver" in the form of high-profile flagship-worthy smartphones.  It points to its upcoming HTC One X, which launches next month on AT&T Inc. (T) and Sprint Nextel Corp. (S) in the U.S. as one such product.  The One X is expected to be locked-and-loaded with the latest iteration of HTC's Sense UI, which it promises is less bloated than past versions.


HTC had reported its unaudited financials early this month, but the AP report indicates that the audited financials have now been filed and are virtually identical to the dismal early April numbers.  HTC promise a big turnaround, with profit predicted to soar at least 50 percent in Q2 2012.

On watch from investors, the once coveted company has little margin for error in the ultra-competitive smartphone market.

Source: Associated Press

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HTC = ehhh ok.
By RjBass on 4/25/2012 11:20:46 AM , Rating: 2
My wife has an HTC Android phone. It is the Inspire which sold for $100 brand new under contract from AT&T a year ago or so. It's not an awesome phone, but for the price at the time it was great.

I personally won't use any Android phone unless it is made by Samsung. Samsung unlocks the boot loader and makes it much easier to flash to Cynagen Mod or other flavor of Android. HTC, Motorola and others make it to complicated.

RE: HTC = ehhh ok.
By nolisi on 4/25/2012 11:44:41 AM , Rating: 3
My last three phones have been HTCs; The first was a Windows phone from the days of Cingular, the second was the G1 (I happened to get this free at release, no contract deal). I stuck with that until the G2 came out, which I actually paid full price for. I've been outside of contract with for well over 4 years.

Even if I didn't want a physical keyboard, I just havent felt that the designs or features of any phone in the last year have justified me upgrading. I stuck with the G1 until it stopped getting updates, and I'll probably stick with my G2 for that long or until the battery becomes unuseable- the build quality of the phone itself is solid, and believe me, I've beat the crap out of it. This might be their problem, they don't have the type of brand loyalty where their customers are willing to update to the next minorly incremental version.

As someone who uses a DSLR, I do smile to myself everytime someone upgrades their phone because the CCD can capture a megapixel or two above the previous model.

RE: HTC = ehhh ok.
By RufusM on 4/25/2012 12:14:31 PM , Rating: 2
HTC was its own worst enemy. Among Android users I know who have/had HTC devices, most have switched to newer Samsung or Apple phones. The old HTC designs were not sexy and had terrible battery life. They had a hard time competing with the others for both form and function. The One line looks really nice though from both form/functionality perspectives. It will be interesting since they are going head to head with the Galaxy S 3 and the iPhone 5 this year; both expected to be heavy hitters.

RE: HTC = ehhh ok.
By acer905 on 4/25/2012 12:23:53 PM , Rating: 1
Here is a side topic. DSLR vs Canon's new ELPH 520HS point and shoot.

Traditionally, one of the main reasons to go SLR was the direct optical link between the viewfinder and the main lens. Unlike non SLR's, what you saw through the viewfinder was exactly the image taken. However, with the advent of digital cameras, and the removal of the viewfinder from many large display P&S's, what advantages does a DSLR really offer a consumer over a high end P&S?

Generally, Cancon put the better CMOS image sensor and stabilization software into their Rebel line. However, now the ELPH 520 has both. It seems that the biggest reason to still get a DSLR is the interchangeable lenses. But, with a 12x optical zoom, I say that the 520HS doesn't really need that anymore.

What do you think? Why still get one of the low level Rebels instead of this?

RE: HTC = ehhh ok.
By bah12 on 4/25/2012 1:57:46 PM , Rating: 4
12x optical
For me personally...It is because this verbiage is virtually worthless. 12x optical is a utterly worthless metric. Zoom only one part of the lenses equation, a far more important stat is the f stop. Physics cannot be overcome by marketing. Simple logic dictates that a smaller lens simply cannot capture the same amount of light, thus a much slower lens. Yes you can do "12X", but at the cost of an extremely slow lens.

I personally have a 70-200mm 2.6 lens (2.6 full range most drop to a 5.8 or slower as they get closer to 200mm) that is a beast, the ability to zoom in and still get that narrow focal point with blurry background and to stop time, just cannot be matched with a "12x optical".

RE: HTC = ehhh ok.
By bah12 on 4/25/2012 2:00:14 PM , Rating: 3
*meant 2.8 and 5.6 on the f stops ... doh

RE: HTC = ehhh ok.
By bah12 on 4/25/2012 2:15:53 PM , Rating: 2
Not that you asked, but I'd like to point out another "pro". I know people would be gun shy of the $1200 I had to pay for this particular lens (Canon EF 70-200mm F2.8L IS). But I did so 4 years ago, and today the cheapest one on ebay with buy it now is $1,395. So with inflation I've actually made money...hmmm might need an upgrade :) I remember looking at the time on ebay and the cheapest one was $900, so I figured by new and if I'm done with it a few years sell it. Worst case I rented a top notch lens for $100/year.

Point is, yes there is a cost to good professional lenses, but if you throw a UV filter on it for scratch protection and take care of it. The depreciation is very low. And you simply cannot get the same picture on a kit lens or point and shoot. It really isn't a matter of technology, but rather a simple matter of physics. With lenses at least...size matters :)

RE: HTC = ehhh ok.
By aliasfox on 4/25/2012 4:28:22 PM , Rating: 2
So far off base...

The Elph might have a CMOS with the same tech as the Rebel, but the Rebel's sensor is at least an order of magnitude (10x, easily) larger than the sensor in the Elph, and that makes a universe of difference in terms of low light sensitivity. The bigger the sensor, the bigger the pixels. The bigger the pixels, the more light they can capture. The more light they can capture, the more 'signal' there is to the 'noise' of random electrons hitting the sensor. The better the signal, the cleaner the picture.

The sensor in the Elph is maybe 1/4 the size of your pinky nail. The sensor in the Canon is about the size of a SD card, and that makes all the difference.

That's not even getting into F stops, contrast vs phase detect autofocus, or anything else that matters...

RE: HTC = ehhh ok.
By bsd228 on 4/25/2012 7:46:21 PM , Rating: 2
"What advantage does the DSLR offer over a high end P&S?"

Where to start? The 520 isn't high end- that would be the S100 or the G12 or the new G1X. The 520 has a sensor 1/12th the size of the Rebels, shoots nearly half the claimed resolution (18 v 10 MP) and in actual results is even further away, has an LCD with half as many pixels, shoots a tad slower, focuses much more slowly, and has noise at iso 100 while the Rebel is good to 800+, and acceptable to at least 3200. That 12X lens you speak is mediocre - the better SLR zoom lenses don't do more than 5x due to the compromises necessary with wider ranges.

If you think the iphone pictures are good enough, then you don't need a DSLR, but otherwise, there's still a world of difference between an APC sized sensor and the 1/2.3" type on cheaper compacts.

RE: HTC = ehhh ok.
By Solandri on 4/26/2012 2:28:13 PM , Rating: 2
Traditionally, one of the main reasons to go SLR was the direct optical link between the viewfinder and the main lens. Unlike non SLR's, what you saw through the viewfinder was exactly the image taken.

Partly correct. Compared to point and shoot film cameras with viewfinders placed beside the lens, what you saw was more accurate. But optical viewfinders rarely show you exactly what you're shooting. Most of them only have 95%-97% coverage (the picture captures a little more than you see). You have to buy the top-of-the-line DSLRs to get a 100% viewfinder because it's hard to align the optics perfectly. Digital viewfinders have actually surpassed optical viewfinders in this respect - they show you exactly what's going to be in the photo.

Another advantage of optical viewfinders is that they're limited only by the resolution of your eye. Even a few years ago this was still an advantage. But LCDs have gotten to the point where they can display more resolution than your eye can see. And the ability to zoom for exact focus is something no optical viewfinder can match at a reasonable price.

what advantages does a DSLR really offer a consumer over a high end P&S?

The larger sensor and use of lenses with wider f-ratios allow for shallower depth of field. This allows creative effects like blurring the background to isolate a foreground subject.

Eventually, this is going to be duplicated by either light field cameras or sophisticated image processing on 3D cameras (capturing two images and comparing to derive depth data, then processing to blur the parts that are further away from the focus point). But we're not quite there yet, so the best way to blur the background is still with a DSLR.

It seems that the biggest reason to still get a DSLR is the interchangeable lenses. But, with a 12x optical zoom, I say that the 520HS doesn't really need that anymore.

With the lower resolution sensors, this didn't really matter. But as we've passed 10 MP and are approaching 20 MP, the diameter of the lens is going to become the limiting factor in resolution on a telephoto. This is a limitation of physics (google Rayleigh limit). A bigger lens can simply resolve more detail at a given telephoto magnification. So a bigger DSLR telephoto will always be able to resolve more detail than a tiny P&S telephoto. It's just that until recently sensors weren't high enough in resolution to hit this limitation.

High-resolution telephoto is always going to be a forte of DSLRs. So you'll continue to see those huge lenses at sporting events for bird-watching. The only question is whether the typical consumer needs that much telephoto and that much resolution.

RE: HTC = ehhh ok.
By spread on 4/25/2012 1:23:51 PM , Rating: 2
I do smile to myself everytime someone upgrades their phone because the CCD can capture a megapixel or two above the previous model.

More megapixels are actually useful. You need to take a picture of a barcode, a document or a spec sheet and study it at home later? Phone can do that. It's also the perfect device for this task since you always have it.

RE: HTC = ehhh ok.
By aliasfox on 4/26/2012 9:21:25 AM , Rating: 2
I'll agree - for specific use scenarios, jpg output from a phone, ultracompact, high-end, m4/3 or even SLR (APS or FF) can be comparable. But the further away you get from bright, low contrast scenes where your subject is 3-7 ft away, the bigger the dropoff in photo quality is for the smaller sensors.

I just loaded a trip's worth of pictures onto my computer - 99% of the time, the difference in quality between my Olympus XZ-1 (a high end P&S) and my iPhone 4 is pretty easy to distinguish. An SLR would've allowed me to push even higher.

RE: HTC = ehhh ok.
By semo on 4/25/2012 2:17:34 PM , Rating: 2
HTC = ehhh - you can say the same thing about budget Samsung phones.

I opted for the Sensation over the Galaxy SII because of the better GPS hardware (according to videos and reviews I found). Also, I'm pretty sure that HTC now ship their phones with an unlocked boot loader.

The article also blames HTC's poor market share on their "bloat" but isn't Samsung just as guilty on that front?

Blame Sense
By jimbojimbo on 4/25/2012 7:12:10 PM , Rating: 2
I actually like the hardware and I enjoy Android but I absolutely hate Sense. Do I own an HTC? No.

RE: Blame Sense
By ShaolinSoccer on 4/25/2012 11:55:29 PM , Rating: 2
I actually like the hardware and I enjoy Android but I absolutely hate Sense.

What exactly do you hate about it? I have an Evo and I find nothing wrong with Sense.

What a crock!
By Apone on 4/25/2012 12:35:16 PM , Rating: 3
- Chickensh%# response there Mr. Chou. Instead of pointing the finger at Apple, you should be blaming yourself and your firm for allowing it to become complacent such as the "cutting corners" part. Strategic Management 101 says that competition breeds innovation. Therefore, HTC shouldn't have fired its CFO and instead should have replaced you Mr. Chou with a CEO who is willing to continue the relentless push for innovation in order to keep up with Apple. Man up and take some responsibility considering one of the first things business school teaches you is Ethics and Corporate Governance.

By JackBurton on 4/25/2012 11:57:34 AM , Rating: 2
Ok, so let me get this straight, the reason for HTC's success is because of the iPhone; however it is the reason for their failure too?

problems not due to iphone 4s
By zephyrprime on 4/25/2012 12:24:21 PM , Rating: 2
Apple did all of its phone competitors a huge favor last year by not releasing an iphone 5. The 4s release was several months after the normal release date for iphones in spring and the 4s is not the 5; rather it is a small improvement over the iphone 4. With a weak competitive offering from Apple, HTC still had problems. The reason is because of competition from other android makers, not from Apple. HTC has made some good phones before but it's offerings as of late have been a little inferior to offerings from competitors. They're not even a lot worse, just a little worse. Consumers have no brand loyalty so even a small competitive disadvantage means you lose. I thing the dearth of advertising to build brand awareness for HTC has hurt it a lot.

Not apple its HTC behind the times
By KOOLTIME on 4/27/2012 4:15:53 PM , Rating: 2
Its not apple, HTC is 5+ months behind the competition. Hardware wise HTC is fine, they have competitive enough for that market hardware offering dual core smart phones now with lots of extras.

Whats really killing them is software. They have yet to deliver the promises from 6 months ago on all the phones customers have bought since then of delivering the android 4 upgrade to them.

Sitting for more then 6 months when the nexus by Samsung has the 4.0, for a while now, the nexus and the htc rezound use the same CPU, so hardware wise they are pretty close. But nobody wants a "new" phone with old OS, its like going to buy a new computer at a store, but asking them to install it with windows 98 or something as such. No matter how good the hardware is, if you sit more then 6 months software wise in today's fast industry you will fall fast.

By ritualm on 4/25/2012 4:35:09 PM , Rating: 1
... but rather HTC's offerings - compared against the likes of Samsung and Motorola - suck.

When HTC's flagship phone was not chosen by Google as the Nexus launch device for ICS, there is a problem. It doesn't look like it will be fixed before Jellybean goes RTM.

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