Business, Hardware

HTC Recovery Still a Long March

HTC Corp. (TPE:2498) posted their second quarter unaudited results, and while the situation has certainly improved over the catastrophic previous quarter (which recorded a 98% profit loss YOY), the road ahead is filled with difficulties and uncertainty.  

Revenue rose to $2.35 billion (NT$70.7b) in Q2 from $1.45 billion in Q1 2013, which is well below $3 billion last year. More notable is the profit rise from the previous quarter ($2.85 million), now at a more tangible $41.61 million (NT$1.25 billion). Still, it is far from the $246 million the company achieved in Q2 2012. All sales were driven by their flagship Android smartphone, HTC One, with five million units shipped in a 50 day period from the start of sales, and performance in May was very good overall.


The problem is, June sales have plummeted, although flagship reviews were very strong ? with many claiming that the unit is the best Android smartphone thus far. Whilst some analysts believe it is due to the saturation of the market with smartphones, and that HTC is not at fault, some others think that company could have done more, as it missed their $60-$70 million profit expectations. It is highly likely that other manufacturers have recorded a drop in sales in the same period of time.

The second half of the year has come under question with a continuation of (s)low performance in smartphone sales, despite stronger investments in marketing. Analysts think the company should announce the rumored smaller and cheaper HTC One variant as soon as possible in order to compensate for another possible fall, though it is worth noting that even at the most difficult period in Q1, company still managed to post profit. HTC Corp. is certainly under a great pressure from other competing companies, predominantly Samsung, which recently announced that they shipped over 20 million Galaxy S4 smartphones.

HTC reportedly cut back on component orders for their devices, and it expects to have similar results in both profit and revenue for the third quarter. HTC’s stock has remained relatively flat on the news.