Print 27 comment(s) - last by bug77.. on Jul 10 at 7:55 AM

Sales, profits, fall short of analyst expectations and early forecasts

HTC Corp. (TPE:2498), Taiwan's largest smartphone maker, released its unaudited results for the second calendar quarter, which ran from April through June.  The results were very poor.

Analysts had expected a recovery to a profit of $8.99B TWD [source].  Instead, HTC under-delivered, posting $7.4B TWD ($247.7M USD) in earnings.  That's down remarkably from the $17.52B TWD that the company pulled in last year.

Revenue was $91B TWD, less than the $94B TWD predicted by analysts.

A number of factors combined to yield the disappointing quarter for HTC.  One negative was a temporary sales ban in the U.S. that stalled the release of certain flagship handsets.  That sales ban came despite HTC vocally agreeing to comply with an Apple, Inc. (AAPL) feature ban.  HTC removed the infringing feature, but was treated with a lengthy delay anyhow.

The company was boosted when the U.S. International Trade Commission refused to grant a hasty "emergency" ban in Apple's third trade complaint against it.  However, that small victory came as little consolation in the wake of the costly market delay.

But the biggest single factor dragging HTC down was arguably the weakening European economy.  Amid the U.S. sales ban, HTC was hit by a double whammy when customers in cash-strapped European nations opted to skip purchases.

HTC has struggled to compete with the flagship handsets of Apple and rival South Korean Android manufacturer Samsung Electronics Comp., Ltd. (KSC:005930).  Samsung also struggled with European sales issues, but its much stronger profit margins and global sales led it to an impressive profit outcome.

EU flags
A weak European market cost HTC, amid stalled U.S. sales. [Image Source:]

Still, all is not lost for HTC, which has grown in multiple since it exploded onto the market in 2010.  The former contractor remains a premiere manufacturer, but weakening revenue and profitability have forced it to commit to trimming its workforce.  The company said likely 1,000 employees would be cut globally.

HTC's flagship U.S. smartphones -- the HTC One X and EVO 4G LTE -- remain quite competitive with Apple and Samsung's product in terms of features, even if they are underappreciated.

Shares of HTC stock were battered over 5 percent in trading on Taipei, Taiwan's stock exchange.

Source: HTC

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Reap what you saw
By bug77 on 7/7/2012 12:05:36 PM , Rating: 3
If I wasn't still waiting for ICS, I might have recommended HTC to 2-3 friends. Sense/TouchWiz/whatever are not marketable, no one buys phones because of them, stop wasting resources. Or, add enough resources to port your additions to a new Android version within a month.

RE: Reap what you saw
By sprockkets on 7/8/2012 1:08:22 AM , Rating: 2
They don't? Sense 3 and 3.6 on the HTC Sensation can control the music app without unlocking, and their notification shade had easy access to recently used apps before ICS. They had the unlock ring before ICS. Further, their phone app has the usual HTC touches like speakerphone on flipping the phone over (been on HTC products since around 2007), or play the ringtone louder if in a pocket, then quiet it down when you pick up the phone toward your face.

All of that is not in stock ICS. And if they don't exist in the SG3, I'm not interested. I know though Samsung did put some other nice touches on their SG3 though.

RE: Reap what you saw
By bug77 on 7/8/2012 6:28:16 AM , Rating: 2
I didn't mean to say Sense is completely useless. But it's not a reason to delay an update for 9 months. I'm pretty sure all the nifty stuff you mention can be sold separately through the Play Store. And by that, I mean those could be made into normal applications rather than integrating them with the OS to the point that makes an upgrade unfeasible.

RE: Reap what you saw
By sprockkets on 7/8/2012 6:03:41 PM , Rating: 2
When you actually watch development of the RUU's, you find out it has more to do with writing drivers for all the hardware to work with the new Linux kernel, not because of "skins". They had a working ICS rom but stuff like wifi sharing and such just didn't work yet.

But even if it did delay it, HTC at least made sense work very well with the new ICS guidelines (and bleeping apple added to the delay of the US launch by their stupid patent lawsuit).

RE: Reap what you saw
By bug77 on 7/9/2012 4:49:10 AM , Rating: 2
Come on, it's not like they have to rewrite the drivers with each release. Android works on Nexus phones from the start, so at least some drivers are ok. Linus releases several kernels a year and these are working on a much larger hardware selection.
Bottom line, put enough resources on the job to get it done quickly or stop doing it at all.

RE: Reap what you saw
By dark matter on 7/9/2012 9:21:49 AM , Rating: 2
ICS really requires 1Gb of RAM. Unless your phone has 1Gb of Ram, then don't expect it to get ICS.

If you have an iPhone 3G, it will NOT run IOS6.

Where is the difference?

Do you still expect a Windows 98 machine to run Windows 7?

RE: Reap what you saw
By bug77 on 7/9/2012 10:04:02 AM , Rating: 2
Very nice, but it usually helps when you know what you're talking about:
That would be ICS+Sense 4.0 on a phone with just 512MB RAM.

RE: Reap what you saw
By rudy on 7/9/2012 3:21:21 PM , Rating: 2
But then what would anyone buy an HTC phone for? HTC has no vertical integration, they dont make the main components nor have tons of money. Apple can secure contracts to get the latest displays from LG, Samsung makes nang, cpus, displays so they can keep the best for themself. HTC does not do any of this. So the only thing they have is quality of phone design and software. Lets be honest today a phone is a rectange with a display thats it, nothing more so there is nothing but the display, speeds as in CPU and software to set them apart.

Get it HTC is stuck making sense, they have no way out unless they can somehow buy into a leading display maker.

RE: Reap what you saw
By bug77 on 7/10/2012 7:55:43 AM , Rating: 2
Phone manufacturers had no problem competing on hardware before the smartphone came to be. Design, ruggedness, battery life, signal strength are all very important features that many reviews these days don't even bother to mention. No, we have to know how good is the FB integration. Ok, design is always mentioned, but battery life is almost always hidden under a 'YMMV' statement.

I'm also fine with competing on software if so they choose. But in this case, 'I released ICS after only 7 months, not 8-9 like the competition' is not acceptable.

"Young lady, in this house we obey the laws of thermodynamics!" -- Homer Simpson

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