HTC is one of the most recognizable smartphone brands in the world. From making handsets that run Windows Phone to great looking Android phones, the company has enjoyed great success over the past few years. However where there are peaks, there are falls. Q2 2011 was a great quarter for HTC, but Q2 2012 has been pretty rough.
From March to June, HTC generated revenues of NT$91.0 billion (~$3.04 billion), while net income after tax was NT$7.4 billion (~$247 million). Compare this to Q2 2011 where HTC ‘s net income was $586 million. That is 57.8% fall in profits. As far as sales go, compared to this time last year HTC has seen a 33% drop in smartphone sales.
It’s not all gloom and doom though. Companies see rough quarters all the time and HTC isn’t the only OEM that went through this. Just look at Nokia and Blackberry. However unlike Blackberry and Nokia, the situation for HTC isn’t self inflicted. Part of the reason for profit falls is stiff competition. Where sales for One X stall, Samsung is having a ball with the new Galaxy S III. This is partly because of Galaxy S III’s global launch. It’s available on all major carriers in the US as opposed to only three for One X. HTC’s lower end Android smartphones also suffer from poor sales with Samsung taking a major chunk of that pie too. HTC has also witnessed poor sales in Europe, which is its biggest market.
Legal issues have also hampered sales. With ITC ruling against HTC in the Apple v HTC case, handset availability was delayed significantly which had a detrimental effect on sales.
This is just one quarter though. HTC can fight back by continuing the tradition of making quality handsets. They just need to sort out their legal issues as well as proper roll out for flagship handsets.