HTC looks to introduce low-cost handsets, slash costs in hope of finding profit

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Poor HTC, they just can’t catch a financial break as the company warned its fourth quarter revenue will fall up to 15 percent below analyst estimates. The company briefed investors earlier today as it struggles to increase its estimated 2.6 percent of the global smartphone market.

HTC says they will look at releasing a broader product line, including more low-cost handsets as it aims for higher profitability into next year. “We’re looking at broader products in this quarter…we aim for higher volume into 2014 that will give better profitability,” company financial chief Chialin Chang said in the briefing, referring to more affordable smartphones. That move would be a sharp turnaround from HTC’s previous strategy of attempting to capture 20 percent of the high-end smartphone market in China.

Let’s be honest about HTC’s future and say that among other problems are marketing misfires that have cost the company mindshare. “Perhaps in the past we have not marketed ourselves that well,” Ben Ho, HTC’s chief of marketing, told Reuters in an October interview.

Is there anyone who ran out to purchase a HTC device based on the fact that Robert Downey Jr was peddling their products? I mean a tinfoil catamaran doesn’t exactly strike me as a winning formula for increasing sales. Ho would not rule out an increase to the marketing budget however, currently set around $1 billion. “We are in the process of tightening up and revamping a lot of things that we used to do.”

Unfortunately with the fourth quarter not looking to make things any better, HTC will need to explore more than just low-cost handset sales to try to win back the hearts and minds of customers flocking to Samsung products in droves. I’m not quite sure Iron Man is up to the challenge.

via Reuters

HTC’s woes continue with arrests and alleged Chinese government conspiracy

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HTC’s former VP of Product Design Thomas Chien (photo: HTC blog)

Taiwanese company HTC has not been having a happy time of late. Senior departures, including its COO; a halving of market share since 2011; former UK execs setting up a rival company; disappointing Q2 financials; and the possibility of the first ever loss in the company’s history in Q3.

But the latest saga in the company’s troubles read more like the plot of a soap opera than real-life. First, several of HTC’s former lead designers were arrested last week on suspicion of fraudulent expenses claims and leaking of trade secrets. Now Engadget reports that one of those arrested, ex-VP of Product Design Thomas Chien, may have been involved in a conspiracy with a Chinese municipal government to use both the trade secrets are purloined cash to create a rival smartphone company in China …  Read more

Reports of HTC’s withdrawal from the smartphone market are greatly exaggerated, says company

Photo: HTC Chairwoman Cher Wang, and Alice Sun's blog post

Photo: HTC Chairwoman Cher Wang, and Alice Sun’s blog post

A recent rumor that HTC was withdrawing from the smartphone market, and that the company would be offered for sale, have been denied by the company. HTC recently warned of a possible loss in Q3 following disappointing Q2 results.

The rumor was started by a post on the the Chinese microblogging site Weibo by EE Times Chinese analyst Alice Sun, a commentator with a generally good track-record. However, rumors of a denial swiftly followed, and Engadget has now received what appears to be a definitive denial of the sale – though interestingly no specific response is made to the suggestion that HTC is pulling out of smartphones …  Read more

HTC faces possibility of first loss in company’s history, missing even pessimistic analyst forecasts

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HTC has followed its disappointing Q2 results by issuing revenue and profit warnings for Q3 suggesting the company may make its first ever loss in its 16-year history.

  • 3Q revenue is expected to be in the range of NT$50bn to NT$60bn ($1.7 to $2M)
  • Gross profit margin is expected to be in the range of 18% to 21%
  • Operating margin is expected to be in the range of 0% to -8%

The forecast revenue is below the average of 22 analysts polled by Reuters, and its projected operating margin of between 0 and -8 percent falls below most of the more pessimistic forecasts. Operating margin is essentially net profit margin before taxes, interest payments and dividends. Its operating margin for Q2 was just 1.5 percent.

It’s an ironic position for the company to find itself in not long after launching what we consider to be the best Android handset on the market …  Read more