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HTC profits drop 70%, company cites Apple's iPhone 4S as biggest cause

post #1 of 43
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Before Apple posted yet another blowout quarter, rival HTC revealed its profits dropped 70 percent thanks largely to the launch of Apple's iPhone 4S.

Apple's latest smartphone was specifically cited by HTC Chief Executive Peter Chou in an analyst briefing this week, according to Reuters. He revealed that HTC, which used to earn more than 50 percent of its revenue from the U.S., will not regain that stature in America.

"A major challenge we faced last year was the big drop in sales in the U.S. because of competition from the iPhone 4S," Chou said. His company saw its net profit in the first quarter of 2012 drop 70 percent year over year to $151.5 million.

HTC hopes to regain some of the ground it has lost to both Apple and Samsung with its new "One" smartphones. They feature improved cameras as well as advanced audio technology.

Chou told investors and analysts that he is hopeful HTC will be "reborn" this year. He said it's the dawn of a "new" HTC that will better execute sales and marketing of its products.

Though U.S. sales won't return to their previous levels, Chou is hopeful that the booming smartphone market in China will help to fill that void. Apple has had tremendous success in China, and revealed in its own conference call on Tuesday that iPhone sales in Greater China were five times greater in the first quarter of calendar 2012 than in the same period a year prior.

HTC


After HTC's earnings disappointed, Taiwanese industry publication DigiTimes reported on Wednesday that the company is working jointly with the social networking site Facebook to develop their own smartphone. The new Facebook phone will be launched in the third quarter of 2012 "at the earliest," sources reportedly told the publication.

The repot said that although HTC and Google previously worked together to build Nexus-branded smartphones, Google has since moved on and now works primarily with Samsung, the leading developer of Android-based phones.

HTC has apparently since moved on to partner with Facebook, and is developing a new smartphone that will "enable and integrate all functions available on the social networking site." The new smartphone will reportedly be a part of Facebook's development strategy when the company becomes publicly traded in the coming months.
post #2 of 43

That sounds a good move for HTC and Facebook, I hope they give Samesung and Google a run for their money.

post #3 of 43

Or maybe HTC's profits dropped because everyone knew their new handsets were launching in Q2, so didn't buy them in Q1.

 

This really has nothing to do with iPhone. The HTC One X has iPhone beat in every department and even though it has only been on sale for a week or two I already see five or six people using them at work.

post #4 of 43
Quote:
Originally Posted by neiltc13 View Post

Or maybe HTC's profits dropped because everyone knew their new handsets were launching in Q2, so didn't buy them in Q1.

 

This really has nothing to do with iPhone. The HTC One X has iPhone beat in every department and even though it has only been on sale for a week or two I already see five or six people using them at work.

Great, another phone that has the iPhone beat based on spec sheet but will never have the sales figures of iPhone.

Ad why are th comparisons always to iPhone? Aren't Samsung and Motorola as big of competitors to HTC as Apple is? Couldn't one argue Samsung Galaxy is the biggest competition to HTC One?
post #5 of 43

 

Quote:
Originally Posted by neiltc13 View Post

Or maybe HTC's profits dropped because everyone knew their new handsets were launching in Q2, so didn't buy them in Q1.

 

That doesn't pass the self-interest test. If it really was anticipation, I am certain HTC would MUCH rather say product update anticipation than name a competitor to explain why their profits are down.

 

Besides, I don't believe that many people anticipate HTC devices.  I have nothing against them, and I'm sure their products are good, I just haven't seen a big following for the brand.

post #6 of 43

 

Quote:
HTC revealed its profits dropped 70 percent thanks largely to the launch of Apple's iPhone 4S.

 

 

Oh really?

 

Quote:
Revenue decline result of product transition cycle, gross margin impacted by margins of older products, lowered scale
contributing to lower operating margin

From HTC's own site: http://www.htc.com/www/investor/

 

No mention of the iPhone at all.

 

What AI quotes from Reuters is true, but they have deliberately left out this bit:

 

Quote:
regain share lost to rivals Apple Inc and Samsung Electronics.

Oh dear, Samsung cracks a mention.

post #7 of 43

in other words... they blame Apple, when they should blame themselves... the real news is they cannot make a phone that can compete.

post #8 of 43

Hey, HTC, here's an idea:

Stop releasing 30 phones a year.

 

You don't even have to pay me for that advice. It's on the house. I don't even like you, so take that as a really big deal.

post #9 of 43
Quote:
Originally Posted by neiltc13 View Post

Or maybe HTC's profits dropped because everyone knew their new handsets were launching in Q2, so didn't buy them in Q1.

 

This really has nothing to do with iPhone. The HTC One X has iPhone beat in every department and even though it has only been on sale for a week or two I already see five or six people using them at work.


Peter Chou seems to think otherwise.

"Apple should pull the plug on the iPhone."

John C. Dvorak, 2007
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"Apple should pull the plug on the iPhone."

John C. Dvorak, 2007
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post #10 of 43

 

Quote:
Originally Posted by cnocbui View Post

Oh really?

 

From HTC's own site: http://www.htc.com/www/investor/

 

No mention of the iPhone at all.

 

What AI quotes from Reuters is true, but they have deliberately left out this bit:

 

Oh dear, Samsung cracks a mention.

 

Yes, really.  That's not what the article was referencing.  Did you even follow the link in the article to see the reference in the Reuters article?

http://www.reuters.com/article/2012/04/24/htc-idUSL3E8FH0MU20120424

 

Quote:

Chief Executive Officer Peter Chou forecast better times ahead for the company after a slump in the first quarter, but said HTC won't return to the days when more than 50 percent of its revenue came from the United States.

"A major challenge we faced last year was the big drop in sales in the U.S. because of competition from the iPhone 4S," Chou told an analysts' briefing on Tuesday on the company's first-quarter results released earlier in the month. He did not elaborate.

 

This is in the second and third paragraphs of the Reuters article.  You went even further out of your way try discrediting the article, but the article in question properly referenced a source.


Edited by JeffDM - 4/25/12 at 7:01am
post #11 of 43

Yes I did look at the Reuters article - that should have been perfectly obvious from what I said.

 

Sorry, AI turned "A major challenge we faced" into:  "HTC revealed its profits dropped 70 percent thanks largely to the launch of Apple's iPhone 4S."

Which isn't warranted in my opinion, particularly when their note to investors cites a quite different reason and mentions the iPhone not at all.

post #12 of 43

You can't blame competition for your failings, you can only blame yourself for not being better than the competition.

post #13 of 43
So how come Samesung cloner phones are selling and HTC cloner phones are not?
post #14 of 43

Why do they (and others) make so damn many different phones?

 

Wouldn`t it allow them to market themselves more effectively with just one or two exceptional feature phones?

 

It would seem if they focussed their efforts to create an exceptional device instead of watering down the market with mediocre devices they`d be in a better position to compete in this market.

 

I`m an Apple fan but have seen some very nice high end HTC phones that I believe should be able to compete better than they are at the moment.

 

They could still go after the large market for cheaper phones by making one very nice "cheap" phone alongside a high-end feature phone to compete with iPhone and Galaxy S.

 

All of the Android phone makers just seem to have a "Lets throw lots of crap to the wall and see what sticks" approach.

post #15 of 43

 

Quote:
Originally Posted by cnocbui View Post

Yes I did look at the Reuters article - that should have been perfectly obvious from what I said.

 

Sorry, AI turned "A major challenge we faced" into:  "HTC revealed its profits dropped 70 percent thanks largely to the launch of Apple's iPhone 4S."

Which isn't warranted in my opinion, particularly when their note to investors cites a quite different reason and mentions the iPhone not at all.

 

I totally agree with you. How AI takes a quote from Chou mentioning the the iPhone as a major challenge and turns it into the headline "HTC's profit drops 70%, company cites the Apple iPhone 4S as biggest cause" is beyond me.

 

Then again, if you are looking for professional journalism with integrity, AI has consistently proven itself not to be the place for that....

post #16 of 43
Quote:
Originally Posted by kingsmuse View Post
I`m an Apple fan but have seen some very nice high end HTC phones that I believe should be able to compete better than they are at the moment.

 

That'd be because you haven't used the software.

post #17 of 43
Quote:
Originally Posted by kingsmuse View Post

Why do they (and others) make so damn many different phones?

 

Wouldn`t it allow them to market themselves more effectively with just one or two exceptional feature phones?

 

It would seem if they focussed their efforts to create an exceptional device instead of watering down the market with mediocre devices they`d be in a better position to compete in this market.

 

I`m an Apple fan but have seen some very nice high end HTC phones that I believe should be able to compete better than they are at the moment.

 

They could still go after the large market for cheaper phones by making one very nice "cheap" phone alongside a high-end feature phone to compete with iPhone and Galaxy S.

 

All of the Android phone makers just seem to have a "Lets throw lots of crap to the wall and see what sticks" approach.


Carriers want exclusive phones to give consumers a reason to pick their network over the competition. So for the US instead of having one phone, ideally you produce at least four. When the Samsung Galaxy first launched that wasn't one model. Each carrier had a different version. The internals were the same, but the case design was unique. I think some even had physical keyboards.
post #18 of 43

don't quite understand the title..   Apple's iPhone has been around for 4-5 years now and HTC did rather well until last year in spite of competition from Apple. Now, is HTC saying that Android users are defecting to iPhones 4S?

post #19 of 43

 

Quote:
Originally Posted by tooltalk View Post

don't quite understand the title..   Apple's iPhone has been around for 4-5 years now and HTC did rather well until last year in spite of competition from Apple. Now, is HTC saying that Android users are defecting to iPhones 4S?

 

That is actually not what HTC is saying. AI is essentially putting words into HTC's mouth and presenting another one of their fact distortions that run rampant on this site.

post #20 of 43

 

Quote:
Originally Posted by cnocbui View Post

Yes I did look at the Reuters article - that should have been perfectly obvious from what I said.

 

Sorry, AI turned "A major challenge we faced" into:  "HTC revealed its profits dropped 70 percent thanks largely to the launch of Apple's iPhone 4S."

Which isn't warranted in my opinion, particularly when their note to investors cites a quite different reason and mentions the iPhone not at all.

 

Your original post did not suggest or imply you looked at the Reuters article.  Your rebuttal doesn't show the article is wrong.  You're arguing maybe the *headline* is incomplete (or possibly misleading), but that's really about where it ends because the article clarifies the details on that point pretty well.

post #21 of 43
Quote:
Originally Posted by e_veritas View Post
That is actually not what HTC is saying. AI is essentially putting words into HTC's mouth and presenting another one of their fact distortions that run rampant on this site.

 

Cult of Mac is saying the same thing. Perhaps words aren't being put anywhere. Perhaps the same conclusion is simply being drawn.

post #22 of 43

 

Quote:
Originally Posted by JeffDM View Post

 

 

Your original post did not suggest or imply you looked at the Reuters article.  Your rebuttal doesn't show the article is wrong.

 

Huh? He specifically stated "What AI quotes from Reuters is true" in his original post. He is not suggesting that the Reuters article is wrong! He is suggesting that AI's interpretation of the article as "company cites iPhone as biggest cause" is a complete fabrication.

post #23 of 43

 

Quote:
Originally Posted by Tallest Skil View Post

 

Cult of Mac is saying the same thing. Perhaps words aren't being put anywhere. Perhaps the same conclusion is simply being drawn.

 

I take no issue with people drawing conclusions from the facts. I would probably reach the same conclusion myself and attribute the cause to the iPhone 4S release. However, implying that HTC stated this as the biggest cause is a complete fabrication and disingenuous.

post #24 of 43

 

Quote:

The HTC One X has iPhone beat in every department and even though it has only been on sale for a week or two I already see five or six people using them at work.

 

Where do you work at?  HTC?  What happens when HTC puts out the HTC One XX next quarter and the HTC One XXX in the following quarter?  One better have a lot more money than sense if they have a spec fetish.

post #25 of 43

 

Quote:
Originally Posted by e_veritas View Post

 

 

Huh? He specifically stated "What AI quotes from Reuters is true" in his original post. He is not suggesting that the Reuters article is wrong! He is suggesting that AI's interpretation of the article as "company cites iPhone as biggest cause" is a complete fabrication.

 

Ah, I see.  I guess I missed that line.

post #26 of 43

No it has nothing to do with Apple.  It has everything to do with incompetent morons who cant be original.

An Apple man since 1977
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An Apple man since 1977
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post #27 of 43

So Facebook is going to pull an Amazon and "fork" Android too. well it might be a modest success - if they give them away for "free" (with contract of course).

 

it would be a lot smarter for Facebook to buy RIM cheap.

 

but overall, Facebook might be the biggest dot.com bubble company of all time. a billion members, sure, but no real business plan with revenues to match the hype. the IPO might be the peak of the current dot.com2 bubble. and then ...

 

 

 

post #28 of 43
The problem with the competition is that they are run like governments. They are structured to cater to everyone and end up pleasing no one. They also have a tendency of creating stovepipe departments, divisions, etc., or silos that serve no purpose other than to preserve the status quo.

As long as this is true, they will always have 30 plus models just to please the shareholders. Market share, yes. Profits, no.
Originally Posted by Granmastak: Labor unions managed to kill manufacturing a long time ago with their unreasonable demands. Now the people they were trying to protect, are out of a job.
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Originally Posted by Granmastak: Labor unions managed to kill manufacturing a long time ago with their unreasonable demands. Now the people they were trying to protect, are out of a job.
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post #29 of 43

It is not 4S that caused their profits drop!

It is pretty much due to a consolidation of Android user base under a single brand (Samsung). 

I guess they don't have guts to admit that they are failing to compete in their own house.

post #30 of 43

 

Quote:
Originally Posted by AppleInsider View Post

... The new Facebook phone will be launched in the third quarter of 2012 "at the earliest," sources reportedly told the publication. ...

 

Facebook?  Phone?  

 

Not sure a one-trick pony has any chance of success in the smartphone market.

Good luck with that, Zuck.  Maybe the Facebook Phone will be featured in "The Social Network 2."

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post #31 of 43

 

Quote:
Originally Posted by AppleInsider View Post

Before Apple posted yet another blowout quarter, rival HTC revealed its profits dropped 70 percent thanks largely to the launch of Apple's iPhone 4S.
Apple's latest smartphone was specifically cited by HTC Chief Executive Peter Chou in an analyst briefing this week, according to Reuters. He revealed that HTC, which used to earn more than 50 percent of its revenue from the U.S., will not regain that stature in America.
"A major challenge we faced last year was the big drop in sales in the U.S. because of competition from the iPhone 4S," Chou said.  

 

Blaming the drop in sales solely on competition from the iPhone is neglecting the other elephant in the room -- Samsung. Surely HTC's main competitor is another vendor using the same OS. Things may turn around for them, though. The "One" series is stunning in many aspects, and I'm not certain that Samsung's next Galaxy phone will be better.

post #32 of 43

 

Quote:
Originally Posted by DrDoppio View Post

 

 

Blaming the drop in sales solely on competition from the iPhone is neglecting the other elephant in the room -- Samsung. Surely HTC's main competitor is another vendor using the same OS. Things may turn around for them, though. The "One" series is stunning in many aspects, and I'm not certain that Samsung's next Galaxy phone will be better.

 

You're right on that, cnocbui pointed out in post #6 that HTC's investor documents also mentions Samsung as a strong competing pressure.

post #33 of 43

 

Quote:
Originally Posted by tooltalk View Post

don't quite understand the title..   Apple's iPhone has been around for 4-5 years now and HTC did rather well until last year in spite of competition from Apple. Now, is HTC saying that Android users are defecting to iPhones 4S?

 

I defected from my refused to boot HTC Tilt 2 to an iPhone 3GS for my wife. I had the phone for only a year and a month. Probably another money center for mobile carriers - replacing phone which die within the two year contract period. Our iPhones haven't.

 

I only owned the HTC phone for an internal Windows Mobile 6.x application. When Windows Phone 7 came out, they wised up and migrated to web-based applications, plus iOS and Android apps.

 

Suggestion to Apple Business: Write many stories about our company. We probably have the largest installed base of a private server hosted app. The company actually suggests using a tablet, especially iPads, which the company gives out as performance achievement awards.

post #34 of 43

 

Quote:
Originally Posted by JeffDM View Post

 

 

Yes, really.  That's not what the article was referencing.  Did you even follow the link in the article to see the reference in the Reuters article?

http://www.reuters.com/article/2012/04/24/htc-idUSL3E8FH0MU20120424

 

 

This is in the second and third paragraphs of the Reuters article.  You went even further out of your way try discrediting the article, but the article in question properly referenced a source.

 

Thanks. Dissembling, shading information, misquoting, misleading, and even outright lying are pretty much the only stock-in-trade of most of the anti-Apple types (which also happens to be primarily the pro-Android types) on this Forum.

post #35 of 43

 

Quote:
Originally Posted by JeffDM View Post

That doesn't pass the self-interest test. If it really was anticipation, I am certain HTC would MUCH rather say product update anticipation than name a competitor to explain why their profits are down.

 

Besides, I don't believe that many people anticipate HTC devices.  I have nothing against them, and I'm sure their products are good, I just haven't seen a big following for the brand.

 

I know quite a few people with HTC Android phones... but I don't think any of them are clamoring for the next great HTC phone.

 

These are regular people who don't follow tech blogs or chase the latest specs. They are in the middle of... or almost at the end of... their first Android contract.

 

Who knows what phone they will choose next.  If they do decide to stick with Android... they don't have to get another HTC phone. That seems to be a problem that all Android OEMs must face.

 

HTC, Samsung, LG, Motorola... they all make "Android" phones.  There's nothing really keeping you with a particular brand. It's the same sorta thing that happens with Windows OEMs. You can buy a Dell one time... and an HP the next.  The consumer doesn't really care.

 

Android didn't really take off in the mass consumer market until the last 2 years or so... and many people are still on their first Android phone.  So again... who knows what they will choose next. Time will tell.

 

I also know many people who completed a contract with an Android phone... and now they're using an iPhone.  That's certainly a popular option these days.

post #36 of 43

 

Quote:
Originally Posted by anantksundaram View Post

 

 

Thanks. Dissembling, shading information, misquoting, misleading, and even outright lying are pretty much the only stock-in-trade of most of the anti-Apple types (which also happens to be primarily the pro-Android types) on this Forum.

 

If your going to make sweeping generalization, you should do yourself a favor and at least make them in a context that actually match your stereotype.

 

The irony of your comment is that post #10 that you agree with and quoted, made by a Moderator (assumed to be pro-Apple), is the one that contains the "misquoting, misleading, and even outright lying". The moderator's post that you quoted was directed to cnocbui's original post, ridiculing him for "going out of his way to discredit the Reuters article". To the contrary, cnocbui stated in his original post "what AI has quotes from Reuters is true", and it was indeed JeffDM who was "misquoting, misleading, and even outright lying". When I called him out on it in post #22, his reply in post #25 was "Ah, I see.  I guess I missed that line."

 

Even the article that you choose to make your generalization is completely contrary to your stereotype. The headline of this article states that HTC "cites Apple's iPhone 4S as biggest cause" for its 1Q loss, but the fact remains that HTC has NEVER stated this, nor has it been mentioned in the referenced Reuter's article, and nor has anyone been able to cite any reference to this statement in subsequent comments. 

 

How does that crow taste?

post #37 of 43

 

Quote:
Originally Posted by JeffDM View Post

 

 

That doesn't pass the self-interest test. If it really was anticipation, I am certain HTC would MUCH rather say product update anticipation than name a competitor to explain why their profits are down.

 

Besides, I don't believe that many people anticipate HTC devices.  I have nothing against them, and I'm sure their products are good, I just haven't seen a big following for the brand.

 

HTC caters to a different crowd than Galaxy and Apple. Tech heads and developers love them. And those who do presentations. Their video playback software is amazing I give them that much. Half of Asian Android developers actually use HTC for test mules rather than Nexus. Same goes for tinkerers and hobbyists who would otherwise dabble their programming for PC and Mac.

 

There are less of them than Jane The Plumber who go for Galaxy and, of course, iPhone.

 

So if iPhone is BMW, Samsung Galaxy is Infiniti, HTC is Lotus; specialized and high performance, but you must know what you are doing.

post #38 of 43

 

Quote:
Originally Posted by lukevaxhacker View Post

 

 

I defected from my refused to boot HTC Tilt 2 to an iPhone 3GS for my wife. I had the phone for only a year and a month. Probably another money center for mobile carriers - replacing phone which die within the two year contract period. Our iPhones haven't.

 

I only owned the HTC phone for an internal Windows Mobile 6.x application. When Windows Phone 7 came out, they wised up and migrated to web-based applications, plus iOS and Android apps.

 

Suggestion to Apple Business: Write many stories about our company. We probably have the largest installed base of a private server hosted app. The company actually suggests using a tablet, especially iPads, which the company gives out as performance achievement awards.

 

Man, you are complaining about Donut-era handset. Try Ice Cream Sandwich.

 

Oh wait. Sorry about the first bit, I am serious here. What did American carriers put in those HTC One handset? Are they all ICS and does HTC run its own updates and app store. If it is 'no' for both question, you and I are talking about different phones altogether.

post #39 of 43

 

Quote:
Originally Posted by Fairthrope View Post

 

 

Man, you are complaining about Donut-era handset. Try Ice Cream Sandwich.

 

Oh wait. Sorry about the first bit, I am serious here. What did American carriers put in those HTC One handset? Are they all ICS and does HTC run its own updates and app store. If it is 'no' for both question, you and I are talking about different phones altogether.

 

You dolt! I'll make the point you missed in my post -> I only bought the HTC Tilt 2 (which I had to get from Business Services) to run the company app under Windows Mobile 6.x. I do everything else on my iPhone 3GS. For as little as I was using it, it still died. (My wife just kept it in her purse off for a week before it died.)

post #40 of 43

HTC's issue is that they still don't have the balls to stick up to the US telecoms, tell them where to go, and actually go through with a 1-3 model strategy.  Doing a whole bunch of customized models for each telecom is a complete waste of time. 

 

As far as the phones themselves, they ARE the best HIGH-END phones on the market.  They're not for everyone, but they are very good phones.  HTC has always combined good specs, good software (HTC Sense adds alot of functionality that stock Android lacks), and great parts and build quality.  HTC gives you the flexibility of Android, with an easier, more seamless experience, as well as an original style and user interface.  Their Windows phones are the best too (sorry Nokia), it's too bad WP7 is such a restrictive OS with terrible driver support (no dual-core, most chipsets don't work, etc...). 

 

I almost wish HTC would just resurrect Meego, WebOS or something (of course adding their own customizations) and go their own path, instead of having to rely on Google and cater to the shitty US telecoms... 
 

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