Business, Hardware

Q1 for HTC: Breaking Yet Another Record – The Lowest Profit Record

Shipping delays of the new flagship HTC One and poor overall performance in the last six quarters took their painful bite in Q1 results for the Taiwanese company. HTC Corp. (TPE:2498) reached a new low when it comes to sheer profit, as net income went down 98% to $2.83 million. This marks the aforementioned sixth decline in a row according to the data, although the results for March were approximately 40% better than the February.

In early January, HTC?s Peter Chou said that one of the largest problems company found was the severe lack of marketing when compared to competition, but even with the new model of operation and yet another new marketing chief (third in a two-year period) Benjamin Ho, they could not execute the ?new and bold? marketing sequence entirely. How could they indeed – when the parts (notably camera parts and metal casings) for the new flagship product are not there as suppliers focused fully on the other companies. HTC One only reached three countries instead of the planned 80 thus far, and analysts noted that the company sold between 4.5-5.5 million smartphones in Q1 total. HTC was among the largest Android vendors in the U.S. back in 2010 and even with doubling of its marketing resources for the current fiscal year they will need more than that.

Worth noting is that the HTC has continued their partnership with the social network giant Facebook Inc., and the awkward fruit of that cooperation is the recently announced smartphone HTC First ? that might actually see more customer hands than the HTC One which got unveiled in February. If the issues with the supply chain continue, prognosis for the Q2 is not bright at all. Additionally, even if they manage to overcome manufacturing difficulties ? there is still a question of the success with the new marketing plan. While the company itself is still not operating at a loss, forthcoming months may prove to be of critical importance ? and the first Facebook Home phone, HTC First is just not enough to carry it upwards.