No Need to Panic Over HTC's First Profit Slump in Two Years

Paul Lilly

If it weren't for HTC, who knows what the Android market would look like today. HTC almost single-handedly turned Google's Android platform into what seemed like an overnight success, only it was overnight. Back in February 2009, HTC was the mobile device maker blitzing the Mobile World Congress in Barcelona with a bevy of Android devices, and HTC's gamble into what would become a hugely popular operating system paid off big time. Record profits would follow, so the fact that HTC's numbers in the fourth quarter of 2011 weren't quite as explosive as previous quarters is not reason to panict. Let's look at the figures.

HTC posted (PDF) a profit of NT$11 billion (around $364 million) in the fourth quarter of 2011, down 26 percent from NT$14.8 billion during the same quarter one year prior. Revenue played out similarly with HTC's sales dropping from NT$104 billion in Q4 2010 to NT$101.4 billion in Q4 2011.

Mums the word from HTC on why its numbers are down, but it doesn't take a economics major to figure out the reason why HTC's struggling compared to quarters past. Google's Android platform is no longer the best kept secret in the mobile market and HTC now faces intense competition primarily from Samsung, but also from a host of other Android device makers, not to mention Apple's still popular iPhone line.

There's a lot of panicked rhetoric around the Web about HTC's latest financial report, but this is a company that's still posting quarterly profits totaling hundreds of millions of dollars. Competition isn't going to let up anytime soon, and that's cause for some concern (for HTC), but that's also a two-way street.

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