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HTC’s Struggles to Continue

by Todd Haselton | February 10, 2014

peter-chou-htc-one

HTC reported its fourth quarter 2013 earnings on Monday, in which the company showed declining profits year-over-year and a poor outlook for the first quarter of 2014. The outlook is particularly concerning, since HTC has struggled most recently against Samsung and Apple, among other competitors, despite launching first-class handsets that have won a lot of praise from reviewers.

The company posted quarterly revenue of NT$42.9 billion, down from revenue of about NT$60 billion during the fourth quarter of last year. Its profits came in at NT$0.31 billion. That’s certainly better than a loss, though it’s also down from the fourth quarter of 2012.

The earnings were in-line with what HTC projected in November, when it said investors could expect revenue to fall between NT$40 billion and NT$45 billion. At the time, however, analysts were estimating revenue of NT$52.2 billion.

“We will continue to stay focused on making the best smartphone and building a compelling mid-range portfolio,” HTC CEO Peter Chou said Monday. “Meanwhile, we are going to communicate better with consumers.” Chou didn’t expand on how HTC will communicate better, though the company has started to spend more on marketing – an arena where Apple and Samsung have more cash to outspend HTC.

The Taiwan-based smartphone maker expects a loss during the first quarter of this year. It projects a decline of NT$2.6 and NT$2.1 per share and revenue to fall between NT$34 billion and NT$36 billion. HTC may have a chance to turn things around later in the year. The company is expected to announce the successor to the HTC One in the coming months, which means that phone should be on the market soon. It will obviously need to be even more popular than the original to start to sway HTC’s balance sheet in any significant way, however, so hopefully the company has more magic up its sleeves.

The company’s chairman recently confirmed that HTC will have a new wearable on the market by the end of this year, but we don’t yet know in what form. It could be a fitness band, or it could be a smartwatch that works with HTC’s array of Android devices. If it’s the latter, it will need to be priced competitively, particularly with the rumored iWatch from Apple.

HTC

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Todd Haselton

Todd Haselton has been writing professionally since 2006 during his undergraduate days at Lehigh University. He started out as an intern with...Todd Haselton has been writing professionally since 2006 during his undergraduate days at Lehigh University. He started out as an intern with...