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HTC One could be company's last big shot at relevance as profits near zero

Taiwanese smartphone maker HTC Corp. (TPE:2498) confirmed on Thursday that it had badly missed Q1 earnings targets, posting the worst ever quarter in its young history.  The phonemaker pulled in NT$42.8B ($1.42B USD), but made very little profit, earning only NT$85M ($2.83M USD) after taxes.  Both revenue and profits missed expectations.

Looking ahead to Q2, HTC hopes revenue will rise to NT$70B ($2.37B USD) and to boost it's operating margin to between 1 and 3 percent, up from 0.1 percent in Q1.

HTC is looking forwards to the release of its 1080p flagship Android smartphone, the HTC One, (and possibly the not-yet-announced HTC One Mini) to nearly double revenues on a QoQ basis.  Embattled HTC CEO Peter Chou comments, "This was a pivotal quarter for HTC.  In February our teams set a new standard for smartphones, launching the new HTC One. The reviews of fans and critics alike have been overwhelmingly positive and we look forward to delivering on the promise of this device."
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HTC is counting on the One to bring its revenue back to life. [Image Source: HTC]

The HTC One has indeed garnered strong reviews, with reviewers in most cases preferring it to the Samsung Electronics Comp., Ltd.'s (KSC:A005930) flagship Galaxy S IV.  However, HTC's sales struggles have led some suppliers to downgrade it in terms of order priority, which has led to parts shortages and delays.  HTC also saw the One banned in the Netherlands after Nokia Oyj. (HEX:NOK1V) successfully argued that HTC's microphone supplier had stolen proprietary technology from Nokia to use in the One.

If the HTC One succeeds HTC may return to growth.  But if it flops HTC Peter Chou is expected to resign, having told executives as much in a meeting (reportedly) last fall.  HTC is undergoing a major shift in its marketing, ditching its "Quietly Brilliant" motto, and adopting a more loudly belligerent marketing stance, similar to rivals Samsung and Apple, Inc.'s (AAPL) snarky marketing departments.

Source: HTC





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