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HTC warns of its first-ever operating loss, will reduce focus on high-end smartphones

post #1 of 48
Thread Starter 
In perhaps yet another sign that the premium smartphone market may be maturing, struggling handset maker HTC has predicted its first-ever operating loss, and revealed it plans to concentrate more on mid-range phones.

HTC


In announcing the results of its second fiscal quarter on Tuesday, HTC revealed it expects to post the company's first operating loss in its history in the third quarter. HTC's operating margin was just 1.5 percent in the third quarter, but the company has forecast a range of zero to negative 8 percent operating margins in the third quarter.

The Taiwanese smartphone maker revealed it plans to launch a range of "innovative and competitive mid-tier products in the coming months." HTC executives acknowledged that it has not been competitive in the mid-range smartphone market, where the industry is currently seeing the most growth.

HTC's announcements come as Apple is rumored to be planning to release its own new mid-range smartphone. It's expected that the company will release a new, less expensive iPhone model with a plastic back in the coming months, alongside a new high-end model.

HTC's changes mark a contrast from last year, when Chief Executive Peter Chou touted his company's insistence on using high-quality materials to build premium smartphones. That strategy eroded HTC's margins, and has now prompted the company to attempt to lower its build costs and sell mid-range smartphones with higher margins.

HTC was once one of the largest smartphone makers in the world, but has seen its share of the market slide as the industry has increasingly become a two-horse race between Apple and Samsung. Recent data from comScore found that HTC held the third-largest share of U.S. smartphone subscribers with 8.7 percent, well behind Apple's 39.2 percent and Samsung's 23 percent.
post #2 of 48
I wonder why out of the Android makers, only Samsung seems to be doing well?
LOL people should just enjoy whatever phone they prefer and stop being d-bags about other phones they don't use. Fanboys are pathetic, regardless of whether they are Android or Apple ones.
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LOL people should just enjoy whatever phone they prefer and stop being d-bags about other phones they don't use. Fanboys are pathetic, regardless of whether they are Android or Apple ones.
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post #3 of 48
A good start for HTC would be to dump Windows phones.
post #4 of 48

The only good thing about the HTC one are the front facing speakers on the phone (they are awesome by the way). The fact that the HTC one is impossible to repair and only have a  4 mega pixel camera is the reason why it cannot compete with Apple and Samsung.

post #5 of 48
Quote:
Originally Posted by BuddyRevell View Post

I wonder why out of the Android makers, only Samsung seems to be doing well?

 

Some of it is due to advertising.  Samsung invested heavily in it last year, and it paid off in spades.  

 

I can easily recall the Samsung TV ads.   If there were any HTC ads, I don't remember them.

 

-

 

Some of it is because of relatively little missteps that add up over time.

 

For instance, I used to love HTC smartphones.  Little by little, that love eroded, due to broken USB ports, strange power button locations, etc.   It was gradual, but pushed me away.

 

I would've come back right away for the HTC One, but it got delayed coming to Verizon.  Another goof.

post #6 of 48
Quote:
Originally Posted by BuddyRevell View Post

I wonder why out of the Android makers, only Samsung seems to be doing well?

Lying, cheating, stealing, paying off governments and telecoms, and generally following the Google way of thinking.
post #7 of 48
I have to disagree, Sam. I know it's a popular meme right now that "the premium smartphone market may be maturing," but it's simply lazy journalism to repeat it without insight or consideration. The fact is that there are only two companies that seem capable of reaching the premium smartphone market, Apple and Samesong. They're having no problem making huge profits in that area. HTC may want to repeat that excuse for failure, but the truth is they haven't figure out how to compete in the "premium smartphone market."

It would seem that if you're Samesong, the way to do it is copy the iPhone, sell them as fast as you can, deny that you're stealing, drag out court cases as long as possible.
post #8 of 48
Quote:
Originally Posted by Tallest Skil View Post


Lying, cheating, stealing, paying off governments and telecoms, and generally following the Google way of thinking.

Seems about right.

post #9 of 48
Quote:
Originally Posted by Don108 View Post

It would seem that if you're Samesong, the way to do it is copy the iPhone, sell them as fast as you can, deny that you're stealing, drag out court cases as long as possible.

 

Actually, Samsung's high end sales didn't take off until they stopped copying the iPhone's looks, and instead advertised their products as alternatives with more advanced features, bigger screens, etc.

post #10 of 48
Quote:
Originally Posted by Negafox View Post

A good start for HTC would be to dump Windows phones.

No, a good start would be for them to stop being YetAnotherAndroidOEM because there's just no money in it if you aren't Samsung. Everyone else is in a race to the bottom like the struggling Wintel OEMs. Besides Windows phones make up around only 1/6th their current smartphone line and it's doubtful it would make any meaningful impact on their issues.

post #11 of 48
Samsung did well by copying Apple and selling lots of cheap knock-offs. But even it is under pressure from the cheaper Chinese knock- offs
post #12 of 48
Quote:
Originally Posted by BuddyRevell View Post

I wonder why out of the Android makers, only Samsung seems to be doing well?

Because their copy machines are more accurate?
post #13 of 48

Actually only Apple is the only one not complaining about the high end market being saturated although they need to sell more phones. Everyone else saw a slight to big downturn in that segment. Now to enter the mid tier market with a premium brand image. Watch out below.  

post #14 of 48

I actually feel bad for them. HTC at least tried to come up with an original design, they didn't settle for cheap plastic, they didn't clone the iPhone. They should be doing better than Samsung

post #15 of 48
Quote:
Originally Posted by BuddyRevell View Post

I wonder why out of the Android makers, only Samsung seems to be doing well?
Quote:
Originally Posted by dnd0ps View Post

I actually feel bad for them. HTC at least tried to come up with an original design, they didn't settle for cheap plastic, they didn't clone the iPhone. They should be doing better than Samsung
The HTC phones have always been better than the Samsung ones. And the One is way better than the S4. Unfortunately, HTC did not "slavishly copy" Apple (even Google was worried that Samsung's designs were too much like Apple's).

For all the jokes fandroids like to crack about the rounded corner issue, it was exactly stuff like that which Samsung exploited, especially with their S2, to get some of the positive emotions people had towards Apple products towards their products.
post #16 of 48
Quote:
Originally Posted by Tallest Skil View Post

Lying, cheating, stealing, paying off governments and telecoms, and generally following the Google way of thinking.

I wonder how much the Samsung black-ops PR campaign against HTC actually hurt them.

I also wonder the same about Samsung vs. Apple.
post #17 of 48
"Predicted"?! If HTC was able to predict its first-ever operating loss, you think HTC would have done something about it prior to incurring.

Now 'experienced'... there's a word...

"HTC has experienced its first-ever operating loss"... Works for me.

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post #18 of 48
I always liked the look of the HTC One...very clean and sophisticated. Just can't stand the Android OS...not that I'm looking to get rid of my iPhone 5, but I think Apple could create a really great phone by following some of the design elements of the HTC One.
post #19 of 48
Quote:
Originally Posted by dnd0ps View Post

I actually feel bad for them. HTC at least tried to come up with an original design, they didn't settle for cheap plastic, they didn't clone the iPhone. They should be doing better than Samsung

 

I second that.  The HTC One is an awesome phone.

 

The general Android population tends to prefer the low priced, discardable kind of hardware.  Just look at all the people clamoring for the Nexus hardware-- it's complete crap.  They're just so eager about it because of the cost, but these things are already taking their last breaths.  The failure rate of the components is super high and the build quality is abysmal.  In the example of the Nexus 7 vs iPad mini, I'm not going to pay $100 less for a device that will fall apart in the next year and has low resale value.

post #20 of 48
I don't think Samsung is doing as well on high end smartphones as they, or the analysts/stock manipulators claim. Remember a couple of years ago when it was all over the blogs and tech news outlets about how the Samsung tablet was selling in the millions and then it was revealed via discovery or testimony that their actual sell through was dismal, as in hundreds of thousands only?

I think HTC just bumped its head against what I suspect is the pervasive consumer mindset: If I'm going to spend a lot of money on a smartphone, I'm getting an iPhone. All the Android mfrs, including Samsung, are faced with this obstacle. It's just that Samsung has spent prodigious amounts of money on advertising and promotions to either a) sell their high end smartphones or b) give the impression that their high end smartphones are selling well.
post #21 of 48

I think part of is the HTC Sense overlay.

 

It's one of those things that you either love or hate.

post #22 of 48
Quote:
Originally Posted by Don108 View Post

I have to disagree, Sam. I know it's a popular meme right now that "the premium smartphone market may be maturing," but it's simply lazy journalism to repeat it without insight or consideration. The fact is that there are only two companies that seem capable of reaching the premium smartphone market, Apple and Samesong. They're having no problem making huge profits in that area. HTC may want to repeat that excuse for failure, but the truth is they haven't figure out how to compete in the "premium smartphone market."

It would seem that if you're Samesong, the way to do it is copy the iPhone, sell them as fast as you can, deny that you're stealing, drag out court cases as long as possible.

Quote:
Originally Posted by BuddyRevell View Post

I wonder why out of the Android makers, only Samsung seems to be doing well?

Quote:
Originally Posted by KDarling View Post

Actually, Samsung's high end sales didn't take off until they stopped copying the iPhone's looks, and instead advertised their products as alternatives with more advanced features, bigger screens, etc.

I wouldn't consider Samsung as a major player in the high end smart phone market.

Samsung's flagship phone the S4 consistently sells for hundreds of dollars less than the iPhone off contract and always has BOGO sales and deals on contract.

Samsung is playing the mid tier market with so called premium phones.

The only true high end smartphone is the iPhone and the truly rich don't want Android devices.
post #23 of 48
A bit of a shame really, I like HTC as I like Sony, f... Samsung though!
post #24 of 48
Quote:
Originally Posted by BuddyRevell View Post

I wonder why out of the Android makers, only Samsung seems to be doing well?

Advertising and Marketing. Ironically, Android fanatics refer to Apple fanatics as "sheep."
post #25 of 48
Quote:
Originally Posted by BuddyRevell View Post

I wonder why out of the Android makers, only Samsung seems to be doing well?

Samsung was the only company with detailed knowledge of Apple's technology, and used their money to steal Apple's patents. They were able to use Googles inside information on Apple software (via Schmidt). 

post #26 of 48
Bad news about a competitor eventually brings out the "Is it possible to love Apple and yet be critical of them?" trolls. It's coming, even though this article has nothing to do with Apple.

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post #27 of 48
Quote:
Originally Posted by blackbook View Post

Samsung's flagship phone the S4 consistently sells for hundreds of dollars less than the iPhone off contract and always has BOGO sales and deals on contract.

No it doesn't at least not in the US. For example, off-contract 16GB S4s go for around $600$640 and $650 depending on the carrier or even $699 from Radio Shack. The off-contract 16GB iPhone 5 is $650. Where exactly are you seeing off-contract S4s selling for hundreds of dollars less than off-contract iPhones? Random Amazon Marketplace or Ebay sellers do not count.


Edited by MikeJones - 7/30/13 at 8:50am
post #28 of 48
Quote:
Originally Posted by blackbook View Post

Samsung's flagship phone the S4 consistently sells for hundreds of dollars less than the iPhone off contract and always has BOGO sales and deals on contract.

 

Likewise, the overwhelming majority of iPhone sales are wherever it is carrier subsidized, or has incentives such as trade-in programs or loans.

 

In other words, where it is priced so that the masses can afford it.

 

It's all about upfront price, no matter whose phone it is.

 

Quote:
The only true high end smartphone is the iPhone and the truly rich don't want Android devices.

 

The "truly rich" buy obscenely priced Vertu smartphones running Android.

post #29 of 48
Quote:
Originally Posted by MikeJones View Post

No it doesn't at least not in the US. For example, off-contract 16GB S4s go for around $600$640 and $650 depending on the carrier or even $699 from Radio Shack. The off-contract 16GB iPhone 5 is $650. Where exactly are you seeing off-contract S4s selling for hundreds of dollars less than off-contract iPhones? Random Amazon Marketplace or Ebay sellers do not count.

I agree.  Where I live a 16GB off-contract S4 goes for $699 and a 16GB off-contract iPhone 5 goes for $649.

post #30 of 48
Quote:
Originally Posted by MikeJones View Post

No it doesn't at least not in the US. For example, off-contract 16GB S4s go for around $600$640 and $650 depending on the carrier or even $699 from Radio Shack. The off-contract 16GB iPhone 5 is $650. Where exactly are you seeing off-contract S4s selling for hundreds of dollars less than off-contract iPhones? Random Amazon Marketplace or Ebay sellers do not count.

Overseas in the EU and Asia the Galaxy S4 is priced closer to the equivalent of $500 while the iPhone's starting price is anywhere from $700-800 depending on the country.

As I said, in the US, S4s have been discounted from carriers since coming out. I was seeing ads for S4s being free with 2 year contract and even some with buy one get one sales. The S4 isn't even 6 months old and its already being given away!

Quote:
Originally Posted by KDarling View Post

Likewise, the overwhelming majority of iPhone sales are wherever it is carrier subsidized, or has incentives such as trade-in programs or loans.


In other words, where it is priced so that the masses can afford it.


It's all about upfront price, no matter whose phone it is.



The "truly rich" buy obscenely priced Vertu smartphones running Android.

$1000+ iPhones dwarf sales of the Vertu.

The point being that the truly rich in the "so called" premium market are buying iPhones by and large and not Samsungs or HTCs.

The media talking point of the high end market being saturated because of low S4 sales was and still is unfounded. Just because Damsung is having a harder time selling S4s doesn't mean the high end market is saturated. It means high end customers aren't interested in the S4...
post #31 of 48
Quote:
Originally Posted by KDarling View Post

Likewise, the overwhelming majority of iPhone sales are wherever it is carrier subsidized, or has incentives such as trade-in programs or loans.


In other words, where it is priced so that the masses can afford it.


It's all about upfront price, no matter whose phone it is.



The "truly rich" buy obscenely priced Vertu smartphones running Android.
Don't Vertu phones run on their own proprietary OS and not Android?
post #32 of 48
I'm confused. CNET just now posted an article how HTC One sold incredibly well! (Implying premium phones are working for them)
post #33 of 48

This is too bad. Although, I am not going to give up my iPhone anytime soon, I recently checked out the HTC 8X and it's a really great Windows phone - build quality is good, great camera, sleek design, etc. Feels solid and not cheap at all. And the Windows phone system is so much better than Android IMO - while there is not as many apps in the store, it's quick and easy to use and a real alternative to iOS that offers something truly different.

post #34 of 48
Quote:
Originally Posted by Rot'nApple View Post

"Predicted"?! If HTC was able to predict its first-ever operating loss, you think HTC would have done something about it prior to incurring.

Now 'experienced'... there's a word...

"HTC has experienced its first-ever operating loss"... Works for me.

 

As I read the article, HTC reported second quarter results, and predicted a loss for the third quarter, as guidance.

post #35 of 48
Quote:
Originally Posted by tundraboy View Post

I don't think Samsung is doing as well on high end smartphones as they, or the analysts/stock manipulators claim. Remember a couple of years ago when it was all over the blogs and tech news outlets about how the Samsung tablet was selling in the millions and then it was revealed via discovery or testimony that their actual sell through was dismal, as in hundreds of thousands only?

I think HTC just bumped its head against what I suspect is the pervasive consumer mindset: If I'm going to spend a lot of money on a smartphone, I'm getting an iPhone. All the Android mfrs, including Samsung, are faced with this obstacle. It's just that Samsung has spent prodigious amounts of money on advertising and promotions to either a) sell their high end smartphones or b) give the impression that their high end smartphones are selling well.

The tablet thing is believable because frankly I don't see people with anything other than iPads but I do see plenty of people using SGS 3s/4s and Note 2s in public.
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post #36 of 48

Let's see who could have helped HTC.  What about Google?  Did they try to help out HTC?  Nope.  Google doesn't care which of its Android handset partners live or die.  The last Android hardware maker standing will probably end up being Samsung.  And Google still won't care.  All they care about is ad revenue.  96% of Google's revenue comes from ads, and they make more money from iOS ads than they do from all of Android.

 

So what about Facebook?  Did that Facebook phone help HTC at all?  Negative.  It was a desperate attempt by Facebook to do something, anything, in the mobile space.  And a desperate attempt by HTC to find any kind of edge over Samsung.  Putting a Facebook layer on top of HTC Sense on top of vanilla Android wasn't the key to selling hardware.

 

And what is HTC going to do now?  They're going to do the same old Android thing but with cheaper hardware.  

 

Love you like a sister, Cher.  Good luck with that.

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post #37 of 48
"will reduce focus on high-end smartphones" … High end? But they don't run iOS! 1biggrin.gif
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From Apple ][ - to new Mac Pro I've used them all.
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post #38 of 48
Those in the know know that HTC produced too much swag. I saw this coming years ago. Apple maintained a calm storm while her competitors produced multiple phones against ONE IPHONE!! playing that game against an outfit like Apple will destroy you.
Now just imagine an iPhone the size of that Galaxy with retina display.
Game over!!!
post #39 of 48
Quote:
Originally Posted by blackbook View Post
The point being that the truly rich in the "so called" premium market are buying iPhones by and large and not Samsungs or HTCs.

 

What's your definition of "truly rich" ? 

 

Quote:
Originally Posted by Lord Amhran View Post

Don't Vertu phones run on their own proprietary OS and not Android?

 

Vertu was owned by Nokia until recently and used Symbian.    Now that they're privately owned, they're switching their smartphones over to Android.

 

Their first Android model cost $10,000 and came with a polished titanium case and the largest sapphire crystal ever made for a touch phone display.

 

Of course, it also comes with single button access to 24/7 concierge service.  Slightly better than using Google or Siri.

 

Is it just me, or do the Vertu phones look like they're made for Russian billionaires?

post #40 of 48
Quote:
Originally Posted by SockRolid View Post

Let's see who could have helped HTC.  What about Google?  Did they try to help out HTC?  Nope.  Google doesn't care which of its Android handset partners live or die.  The last Android hardware maker standing will probably end up being Samsung.  And Google still won't care.  All they care about is ad revenue.  96% of Google's revenue comes from ads, and they make more money from iOS ads than they do from all of Android.

So what about Facebook?  Did that Facebook phone help HTC at all?  Negative.  It was a desperate attempt by Facebook to do something, anything, in the mobile space.  And a desperate attempt by HTC to find any kind of edge over Samsung.  Putting a Facebook layer on top of HTC Sense on top of vanilla Android wasn't the key to selling hardware.

And what is HTC going to do now?  They're going to do the same old Android thing but with cheaper hardware.  

Love you like a sister, Cher.  Good luck with that.

How is Google supposed to help out?
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