Smartphone Maker HTC Sees 2Q Profits Slide 60 Percent

Paul Lilly

Companies like HTC and every other smartphone maker competing against Apple and Samsung face a harsh reality, albeit an obvious one -- they're not Apple or Samsung. That should go without saying, but it doesn't make it any easier to swallow the fact that everyone seems to want an iPhone or Galaxy S III. HTC, which played a major role in popularizing Android as a legitimate contender in the mobile OS space, is now struggling to remain relevant in a market it helped create.

HTC's profits in the second quarter came to NT$7.4 billion (around US$246.8 million). That's better than posting a loss, but for HTC, that represents a 60 percent decline from one year ago. HTC's revenue dropped almost 27 percent NT$91.04 billion (about US$3 billion). Despite pulling in a profit, these are concerning numbers for HTC.

The problem has to do with growth potential, and right now, HTC's numbers are moving in the wrong direction. Looking ahead to the third quarter, HTC doesn't expect much relief, forecasting revenue to drop even further to NT$70-80 billion. The company is trying to remain positive, pointing out "growing brand awareness, strong operator partnerships, and an increasing retail presence" in China, but a lot is riding on HTC's ability to turn things around.

HTC's betting big on its HTC One series, which represents a recent shift in strategy to focus on a handful of smartphone models rather than deluge the market with a million different devices.

HTC 2Q Business Review (PDF)

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