HTC Continues to Struggle, Amid Weak European Sales, Apple Ban
July 6, 2012 6:25 PM
Sales, profits, fall short of analyst expectations and early forecasts
HTC Corp. (
), Taiwan's largest smartphone maker,
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 [
]. 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. (
) 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
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.
struggled to compete
with the flagship handsets of Apple and rival South Korean Android manufacturer Samsung Electronics Comp., Ltd. (
). Samsung also struggled with European sales issues, but its much stronger profit margins and global sales led it to an impressive profit outcome.
A weak European market cost HTC, amid stalled U.S. sales. [Image Source: Europe.bg]
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.
"This is about the Internet. Everything on the Internet is encrypted. This is not a BlackBerry-only issue. If they can't deal with the Internet, they should shut it off." -- RIM co-CEO Michael Lazaridis
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