08
Apr
htc logo

There is no joy in Taoyuan this morning, as HTC's first quarter financial results have become public. The Taiwanese company has reported the lowest profit in its 16-year history, with just $2.8 million USD ($85 million Taiwanese dollars) in net income for Q1 2013. It's the sixth quarter in a row that HTC has posted declining profits, and a staggering year-over-year drop of 98%.

htc chart2

The news came from a somber release on HTC's website, without any of the usual fanfare. Analysts reaction compiled by Bloomberg blame the drop on delays for the flagship One phone, which has now been pushed into an April launch in the US and other markets. Even with a delay of just a few weeks, HTC can't claim sales for the first quarter, though nearly all the manufacturing costs are realized within the three-month window. HTC has lost more than two-thirds of its market value in the last two years.

There's no two ways about it: things look pretty bleak for HTC at the moment. If the One sees the same lukewarm response as the One X, One S, et cetera from last year, the company will be in bad shape. It's a startling fall for HTC, which at one point was arguably the largest and most well-regarded smartphone manufacturer outside of RIM. For a little perspective, HTC was fourth for calendar year 2012 smartphone shipments with a 6% worldwide share, behind Nokia and tied with RIM/Blackberry. Samsung claims the #1 spot with 39.6%. Things are a little better in the US, but even here, HTC has less than half of  Samsung's marketshare and just 9.3% total. A few months can make a big difference - with the meteoric rise of Samsung, HTC is on the brink of a marketshare collapse, especially if it can't successfully counter the Galaxy S4. Increasing competition from smaller players like Huawei, Sony, and ZTE is exerting even more pressure.

Still, things could be worse. The company is posting a profit, after all, and the loss in footing this quarter could be successfully turned around in Q2, assuming steady sales of existing and new stock. The HTC First, the first (natch) in a new series of Facebook Home-focused smartphones, could open up new territory in the low and midrange. The rest of 2013 will be crucial for HTC's continued viability.

Source: HTC

Jeremiah Rice
Jeremiah is a US-based blogger who bought a Nexus One the day it came out and never looked back. In his spare time he watches Star Trek, cooks eggs, and completely fails to write novels.
  • http://twitter.com/punitvthakkar Punit Thakkar

    HTC : Quietly Brilliant.
    HTC's Profits : Loudly Falling.

    • http://twitter.com/Pungo4 Pungo

      The latest phone are HTC Wp8 phones.

      They must have failed or flopped.

      • Joe_HTH

        LOL! They don't make anywhere near the WP8 devices they do Android devices you idiot. They are failing because of Android. They're probably making more money on their two WP8 devices than they are on their Android phones.

        The fact is, every single Android OEM, save Samsung, is either struggling and/or losing money. Dell flat out said they couldn't make money on Android. Motorola is completely useless and hasn't profited in ages. Same goes for LG, Asus, Acer, ZTE, etc. Not even Google is making money on Android. That's why Schmidt's boasting of Android activations means nothing. Who cares how many are sold when you're not making any money. Microsoft makes more money off of Android than Google does.

        So keep spouting BS you tool. Maybe that helps you feel better. It only proves you're an idiot.

    • cailne

      HTC is both Lousy and Ignorant.

      it amaze me how the company still alive..

    • Wam31

      First I should say that I love HTC, or rather loved...

      But to be honnest, I don't get why what the f... they're doing.

      - HTC Sense, if useful back in the day, is now crap
      - They went all locked/encrypted bootloaders on us
      - no more removable battery
      - no more SD slot
      - and now a pretty much worse camera than any other (read GSM Arena HTC One review !)
      - and don't get me started on Android updates...

      I mean come on HTC ! No wonder you don't sell anymore. When you're down, make what people want !
      And what you make doesn't seem to be it...

  • saltyzip

    The only people who can help HTC out, is the likes of you and me. However I don't see my loving relationship with my Nexus 4 ending any-time soon. My Wife has the HTC One X and loves that too, but when the time comes to upgrading, I would find it hard to justify not getting her a Nexus, no matter how much she had a go at me.

    • Lalit Mali

      Agreed. It's you and me who can help HTC.
      It's only us who can pass some profit to Samsung competitors and keep the competition alive and innovative!

      • saltyzip

        I would pick the HTC One over the Samsung GS4 because I prefer the One's look and speaker layout. However most importantly I don't like the idea of Samsung becoming even more dominant in the Android space than it already is. In their GS4 presentation they didn't mention Android or Google once and that to me is somewhat shameful and even snobbery, without it they wouldn't be where they are today. I wish more people could break out of contracts and buy phones like the Nexus 4. Get themselves a giffgaff sim and unlimited data bag and away they go.

        Even Orange will price match giffgaff, but will only give you 3GB download Max p/month, which is ample for most people.

        • HotInEER

          I agree, seems to me Samsung is trying to wear their big boy pants. I love their products don't get me wrong, heck, half my house is Samsung, but, if they keep trying to snub Android and Google, I will not purchase them. I went with the HTC One because I love what it has to offer and the reviews are spectacular.

          I still have a soft spot for them after owning the Hero and Evo 4g.

        • Freak4Dell

          Yeah, the Samsung train needs to slow down, but if you try to convince anybody to go with something other than Samsung, you get bashed over the head with rambling about SD cards and removable batteries.

          The real problem is that while HTC and the other manufacturers were working on devices, Samsung decided to market the hell out of the junk they put together.

  • David Dudovitz

    I have the DNA, and I still believe that whatever anyone may think of Sense, HTC still makes some of the best hardware available, and I would be very sad to see them go.

  • http://www.facebook.com/georgealexiouvalentey George Av

    HTC are dead, the One is a decent phone, but isn't enough to make people forget HTC's history......My HTC One X is still on 4.0.4, and my desire didn't even get 4.0.4. little things like that drive people away from HTC... I'll pick up the One for the soul reason that it's a decent phone and i may use it from time to time. Bad luck HTC, your life is over.

    • Wei Hong Ho

      So let's assume that the whole world HOX are running 4.0.4 then. My HOX must have miraculously get 4.1.1 for no reason. ;)

      • http://www.facebook.com/georgealexiouvalentey George Av

        well, mine is still on 4.0.4 Sure i can get 4.2.2 on it But i really don't want to go though the pain of turning S-Off -Off.... Anyway, i expect a good user experience out of the box, no mods, also updates to the latest software.. at-least semi latest.

    • saltyzip

      Samsung is known to be one of the worst at providing upgrades to phones, but is hasn't stopped them succeeding. Where HTC has failed is they haven't been able to stand out from the crowd. Maybe their HTC First facebook phone will sell like hot cakes to the younger audience assuming it gets favourable reviews.

      • barnassey thomas

        That was for a lot of their 2010 phones. for the phones that came out in 2011 and 2012 they have updated almost every single one. Which is more than i can say about almost htc's entire lineup.

      • Tarun Pemmaraju

        The difference is that they have turned themselves around and have provided Jelly Bean to nearly every (low, mid and high end) phone from 2012 and for their 2011 flagship, the Galaxy S II. Which other Android manufacturer is doing that?

      • bazker

        Samsung is known to be one of the best at providing upgrades to phones

      • http://www.facebook.com/georgealexiouvalentey George Av

        Are you stupid? Samsung is known for being the best android OEM (apart from google) To update their phones the quickest..... Come here and actually talk sense next time.. geez.

        • HotInEER

          I think what he's trying to say is Samsung hasn't always done this. I know, they never updated a ton of my phones and or other products such as their Blu-Ray players. I swore them off for a long time but then fell in love with the S2 and S3 but I'm giving HTC another show and I ordered the HTC One. If they can start updating their phones, they will be ok, but honestly, must consumers don't care about that or even know, it's us tech savy people that care.

          • http://www.facebook.com/georgealexiouvalentey George Av

            Good luck with getting official 4.2.2 or 5.0 on your One by the end of 2020! :P

  • Andrew

    In their defense, the next quarter should be a lot better this one. I was in a phone shop yesterday looking at buying a One, and the girl there said most of the staff have bought one, and that generally they're selling very well. When I asked her about the BlackBerry phone that just came out, she said she's only sold one. After the incredible AnandTech review, I suspect a lot of people who were on the fence will opt for one too.

  • Lalit Mali

    Sony is a small player? :-o

    • http://www.facebook.com/ShinobiPhoenix Cody Shiranai

      If you keep up on what of their product lines ACTUALLY turn a profit without having to be sold at a loss anyway (yes, that would very much INCLUDE their entire video game line, as all PS's and the Vita especially, since Sony loses money each time they sell them). Sony's main weapon is to get it in to home, so that you will be compelled to spend money using the device later.

    • http://www.facebook.com/georgealexiouvalentey George Av

      Sony is a very small player.. look at their "High end" piece of crap phone the Xperia Z... it sucks so bad it's not even funny,

    • Jeremiah Rice

      In terms of smartphone sales, yes. But these days anyone who isn't Samsung or Apple is playing second (or third, or fourth) fiddle, at least when it comes to marketshare.

  • http://www.facebook.com/ShinobiPhoenix Cody Shiranai

    If Facebook at least helps PUSH Facebook Home enough and especially the HTC First, I think people will gravitate to it and through mid-range support they will pull back up and then the One will put them back in good graces just like The Incredible did (because teeny-boppers will push anything on their friends if they think it's the cool thing... remember the Razr and the Chocolate?)

    Most people don't even KNOW what a Custom Launcher is, so if you tell teenage girls there's a phone that is always on Facebook without an app and it shows everything on their lockscreen, they will go for it. I mean honestly, they pushed Hanson, Justin Bieber, and Twilight, The "First" is surely the best thing teenage girls could make popular.

    --------------
    On another note: If HTC did drop so bad they could be bought, who do you think would do it? Would Google swoop in and buy them for the patents and suddenly the One is a Nexus line and FINALLY have a true Asian market presence? Would Samsung do the ultimate in "Microsoft saves Apple" moves and all fanboys will have to die in the flames of their own agony of joining forces? Would Apple pull the dick move of all time and buy them and make (more) iPhones from HTC tech and their patents and actually have some of that innovation they are always pretending to have and upgrades they never do?

    • HotInEER

      I would love for Google to swoop in and purchase HTC. That would be the best thing that could happen, or even if Samsung could come in and buy them. Imagine the build and body of the HTC One with Samsung internals, and WOW...awesome combination.

    • Freak4Dell

      I would love for Google to buy them, but if Google keeps going with this "no preferential treatment" policy, there's not much point in buying HTC. The phones wouldn't really change much. For a Google buyout of HTC to actually mean something to consumers, Google would need to actually use HTC for something and stop farming out the Nexus work to other manufacturers. They're not doing that with Motorola, so I doubt they would do it with HTC.

      We can dream, though. A Motorola/HTC supermanufacturer with Google's money would be amazing. Not only would their products be more prominent in the marketplace, but Samsung and other manufacturers would actually have to work hard to compete for once, and we'd start seeing amazing devices from all corners.

  • fixxmyhead

    No surprise here

  • tjp

    Such a shame. I pretty much buy HTC phones exclusively because I like them so much. No sure why they won't catch on.

  • StevSeattle

    Dear HTC,

    We've really had some fun in the past 2 1/2 years but you've changed and I don't think I know you anymore. I tell you I want to add storage and be able to change my battery and you tell me not to worry my little head. I tell you that I want a long term relationship which includes software upgrades, but you just ignore me. The HTC One is a pretty face, but I'm looking for something more. I've been hoping you'd realize that I can't stay with you if things don't change, but now it's too late. I don't want to see you anymore.

    It was great while it lasted,

    A previously happy HTC customer.