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HTC barely ekes out a profit, expects HTC One to turn fortunes around

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HTC’s financial woes for the past 18 months continued as the company announced quarterly results on Thursday. Smartphone sales have been down for some time but the company managed to rake in NT$42.8 billion (US $1.45B). Unfortunately, operating margin was a scant 0.1 percent with overall first quarter profits of NT$85 million (U.S. $2.88M).

It certainly didn’t help this quarter that HTC had to delay its new HTC One launch by a few weeks. The flagship smartphone has outstanding design and performance; it will surely help HTC this quarter once the global sales channels have inventory to sell. But I recently noted that HTC’s problems run much deeper than just an HTC One handset delay.

The company — once the biggest up-and-coming Android(s goog) phone manufacturer — has watched itself be overtaken by Samsung, ZTE and Huawei, to name a few.

htc-rezound-beats-earbuds-600x438Brand awareness and a relative lack of marketing haven’t helped. Neither has money spent on poor decisions: The investment in Beats Audio hasn’t proven to be that helpful and efforts to create a small Android tablet — before such devices were truly popular — didn’t pan out either. And I’m not yet sold on the HTC First, a Facebook-centric handset, on helping the company stand out from the crowd.

For all of its struggles, HTC still has a positive outlook for next quarter; mainly due to the HTC One. The company expects a huge bump in revenues: NT$70 billion. Gross margin should be between 22 and 24 percent — up from the 20.3 percent of the most recent quarter — and operating margins are expected in the 1 to 3 percent range.

If I were HTC, I’d take as much of the profits as possible and dump them into marketing its latest handset. What good is a winning device if people are surrounded by ads from Samsung, Apple(s aapl) and others?

3 Responses to “HTC barely ekes out a profit, expects HTC One to turn fortunes around”

  1. Robert Smith

    So true HTC must use a better marketing strategy. Samsung’s s3 is no better than the one x. I heard so much about the Sg3 I forgot about the onex

  2. HTC’s biggest fall IMO has been neglecting their former cash cow – Windows Mobile. MS made WP7 and WP8 far too conservative, and their hardware restrictions limiting physical buttons and SD card connectivity for example didn’t give much room for manufacturers to innovate. That lays a big part of the blame on Microsoft.

    I’m still stuck on my import Touch Pro 2 even after all these years. It’s a great phone, yet when I look at what it can do that today’s WP8 devices lack (sliding keyboard, SD storage, tilting screen, removable battery) it does make me wonder if smartphone innovation has effectively gone down the toilet.

    I’d love to see a modern 4G-capable Touch Pro 3 running WP8 with all the great features the TP2 has. There shouldn’t be any technical hurdle to making it happen either.

  3. I’m a huge HTC fan…..I currently own a One X and my HTC One is supposed to arrive today. I have long said that HTC should fire whomever their marketing director is. There are a lot of people like myself who do not want an iPhone nor do they want a cheap, plasticky Samsung……the One is bar none the nicest phone on the market.

    HTC…MARKET THE PHONE!!!! Samsung