Despite a rebound from record low profits, HTC’s challenges still loom large. On Monday, the company announced its unaudited second quarter financials, showing a profit of NT$1.25 billion ($41.63 million), largely thanks to its flagship HTC One handset. However, The Verge notes that amount of profit is still 83 percent lower than the year ago quarter, showing that HTC is still struggling.
Part of the comeback issues, according to analysts, are the lack of products in HTC’s pipeline to continue the growth. Analysts speaking to Reuters don’t expect a variety of new products coming from HTC in the next several months, save perhaps for an HTC One Mini handset. There is a Google(s goog) Edition of the HTC One — my review unit arrives today, so stay tuned — but it’s aimed at tech savvy Android enthusiasts, which is a small group when compared to the market as a whole.
If true, HTC will likely face stiff competition from an expected new iPhone model as early as September or October. And rival Samsung generally releases new products on a more regular basis, making things more difficult for HTC. Even so, Samsung may be facing a similar problem as Bloomberg reports the company missed internal sales expectations for its hero device, the Galaxy S 4.
While the smartphone market continues to grow, it’s also maturing: This is a market that began in earnest about six years ago. Some regions of the world are saturated with smartphone owners so the “easy” growth is gone in those countries. Yes, there are still about 6 billion in the world that don’t have a smartphone but the sales growth where those people live is limited by several factors: Economics and network infrastructure to name a few.
Given that, what can HTC do? Much of the company’s focus of late has been on mid-range and high-end devices. Effectively, HTC ceded the low-end of the market to those that specialize in low-cost Android devices and feature phones. Changing strategy now could be difficult. The alternative for HTC, however, is to continue down its current path and try to differentiate itself from Samsung, Apple(s aapl), LG, Sony(s sne) and others to name a few; something that’s not easy to do.