As predicted by the company itself, Android device manufacturer HTC today reported bleak earnings results for the April through June period. For the three month period, the Taiwan-based company lost NT$8.03 billion after tax and operating costs are taken into consideration. HTC reported profits during the prior four quarters, but apparently those couldn’t hold, likely due to lackluster demand for the One M9. Today’s reported losses spread out over the company’s shares come out to an approximate NT$9.70 ($0.3) per share. Revenue for the quarter was NT$33 billion.
None of this is terribly surprising. In early June HTC slashed its earnings guidance for this period, and today’s results fall in line with that guidance. At the time of its adjustment, the company attributed the heightened losses to “slower demand for high-end Android devices, and weaker than forecast sales in China” as well as product mix change and lowered scale – basically, the company changing up its product lineup and reducing its production output.
HTC’s CEO Cher Wang held an investor meeting in early June during which she outlined the ways she will drive the company towards profitability. Those include releasing a new “hero product” in October that includes significant improvements in the design and innovation departments, improving its production efficiency through outsourcing, changing up its product mix strategy for smartphones (aka replacing or killing off low-performing phones), and rethinking its product marketing (it’s no longer making those Robert Downey Jr ads). HTC will also continue to invest in R&D products like the Vive virtual reality headset.
This year has been yet another trying one for HTC, with not much positive news coming out about the company. With hungry, lean OEMs (original equipment manufacturers) at the low-end building high quality phones at low prices and continued innovation and massive marketing budgets at the high-end (Samsung, Apple), it’s easy to see why HTC is struggling so much. It doesn’t have the kind of brand awareness across the world that others do – people don’t aspire to own HTC phones like they do with Apple or Samsung or Xiaomi devices – nor does it have a large marketing budget to get that awareness. The company had to do blind tests just to demonstrate to people how good their phones actually are, as otherwise the HTC branding not typically associated with luxury and class may have biased them.
October is coming up very fast, and the usual suspects have been slowly leaking out details about an upcoming HTC device being tentatively called the “HTC Aero.” According to Evan Blass it will be dropping in the fourth quarter of this year, in which October falls. We’ll be keeping our eyes out.
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