HTC cites competition from Apple's iPhone as profits drop 26%

Posted:
in iPhone edited January 2014


HTC on Monday revealed that its handsets are struggling against Apple's iPhone, as well as Android-based smartphones from companies like Samsung, leading to a 26 percent drop in fourth-quarter profits.



The outlook for the current quarter is even worse, with HTC officials projecting a 36 percent drop, according to Apple 2.0. HTC Chief Financial Officer Winston Yung told investors on a conference call Monday that his company is in the midst of a product transition that will hurt sales in the next quarter.



"Our weakness in first-quarter guidance also comes from facing competition in the U.S. from iPhone and Samsung," Yung said. "LTE handsets also didn't meet our expectations."



In addition to being once of the first Android smartphone makers, HTC was also among the first to embrace 4G long-term evolution technology, the high-speed wireless data standard positioned to replace 3G. Apple has stayed away from LTE in its wireless devices, citing poor battery life with the first generation of 4G chips.



HTC declined to reveal any specific sales figures for its smartphones on Monday, so its unknown how the Taiwanese company fared unit-wise against the record 37 million iPhone sales Apple saw in the holiday quarter. HTC has promised to introduce four new handset models at the Barcelona Mobile World Congress, which will kick off on Monday, Feb. 27.



HTC has been closely aligned with Google Android since the mobile platform debuted in 2008. In fact, the HTC Dream, which was marketed in the U.S. as the T-Mobile G1, was the first phone on the market to run Android.











But since then, HTC has been surpassed by rival competitors who also build Android handsets. During the holiday quarter, Samsung is estimated to have sold about 32 million total smartphones, shy of Apple's 37 million.



HTC is also involved in a number of patent infringement suits with Apple, in which each has accused the other of stealing its ideas in smartphones. Apple won one such case against HTC in December related to "Data Detectors" in operating systems. Microsoft is believed to receive $5 per unit for each HTC Android device sold.



[ View article on AppleInsider ]

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Comments

  • Reply 1 of 44
    solipsismxsolipsismx Posts: 19,566member
    Apple's not HTC's problem, it's Samsung.
  • Reply 2 of 44
    Quote:
    Originally Posted by SolipsismX View Post


    Apple's not HTC's problem, it's Samsung.



    Apple's not HTC's problem, it's Samsung AND HTC. lol



    HTC was amongst the top of the Android OEMs...but lately their offering have felt very Motorola-ish..



    Plus the look of their phones has gotten VERY stale.
  • Reply 3 of 44
    solipsismxsolipsismx Posts: 19,566member
    Quote:
    Originally Posted by AbsoluteDesignz View Post


    Apple's not HTC's problem, it's Samsung AND HTC. lol



    HTC was amongst the top of the Android OEMs...but lately their offering have felt very Motorola-ish..



    Plus the look of their phones has gotten VERY stale.



    That's true. A couple years ago if I were to buy an Android-baed device I would have chosen HTC as the vendor but today it would be Samsung. HTC simply has no compelling HW. I would also no longer by a WP7-based device from HTC, instead I'd go with Nokia.
  • Reply 4 of 44
    This always happens in tech. You get the boom and then the bust.

    How long did HTC think they were really going to get away with selling so many different phones a year to the same core audience?

    The entire tech industry is driven on the narrative of selling, "WHAT'S NEXT". But soon they will be asking themselves "WHAT'S NEXT".
  • Reply 5 of 44
    lkrupplkrupp Posts: 6,381member
    Quote:
    Originally Posted by maccherry View Post


    This always happens in tech. You get the boom and then the bust.

    How long did HTC think they were really going to get away with selling so many different phones a year to the same core audience?

    The entire tech industry is driven on the narrative of selling, "WHAT'S NEXT". But soon they will be asking themselves "WHAT'S NEXT".



    So much for the market share argument. It's not how much you sell but how much profit you make. You can sell the most of anything but you still go out of business if you don't make any money doing it. Amazon missed its analyst expectations even with the "iPad killer" Fire selling "millions."



    But Android is "winning" isn't it, even though Google makes most of its money by selling ads and customer data.
  • Reply 6 of 44
    dasanman69dasanman69 Posts: 12,963member
    Quote:
    Originally Posted by SolipsismX View Post


    Apple's not HTC's problem, it's Samsung.



    And Motorola, LG, and the rest that've hitched their wagon to Android. Question is which of these will go by the wayside like Gateway, and Dell? They're going to over saturate the market just like PC vendors did.
  • Reply 7 of 44
    gordygordy Posts: 961member
    Maybe if they didn't make so many of them?
  • Reply 8 of 44
    solipsismxsolipsismx Posts: 19,566member
    Quote:
    Originally Posted by dasanman69 View Post


    And Motorola, LG, and the rest that've hitched their wagon to Android. Question is which of these will go by the wayside like Gateway, and Dell? They going to over saturate the market just like PC vendors did.



    Primarily, I'd say it's because of Samsung. If they$ didn't exist (but Apple did) I think HTC, Moto er al. the other struggling Android-based vendors would be doing much better. Clearly speculation on my part but I see Samsung is unbalancing. One could argue that Apple's dominance is also unbalancing but we just also weight the market's stagnation and weakness prior to the iPhone's emergence.
  • Reply 9 of 44
    In recent years HTC has made 33 different android phones and 17 Windows Phone models.



    That's 50 different phones since 2009 or so.



    That is just a terrible business model from an R&D expense perspective and logistics perspective.



    It's just not sustainable long term, especially when you consider many of those phones will be junk by design.
  • Reply 10 of 44
    The Android vendors can brag about selling as many smartphones as they want, but if their business isn't profitable it doesn't add up to a hill of beans. Wall Street doesn't seem to fully comprehend this. Even if most Android vendors sold twice as many smartphones as they're selling now, they're not going to turn a profit. The Android smartphone business model is not as good as Wall Street thinks it is. Consumers are eventually going to figure out that buying some cheaper Android model to save money isn't going to get them what they really want. I think many Android smartphone buyers are being fooled by carrier sales personnel into thinking they're getting something the equivalent of an iPhone and they're not. I'm not saying that owning an iPhone is the best fit for everyone since I'm sure there are some very feature-rich Android smartphones for those that require those features, but I think their overall quality is sub-par compared to an iPhone and they don't hold their value as well due to the huge number of models.



    Anyway, Apple is going to continue to clean up in the smartphone market when it comes to profits and that's going to keep Apple and the iPhone on top for quite a while to come. Survival is all that most Android vendors will be able to manage. That's how I believe Apple will force most of the Android rivals out of business over the long term. Build a great product and consumers will come to you and stay. If I can possibly afford to, that's the type of company I want to do business with.
  • Reply 11 of 44
    Quote:
    Originally Posted by SolipsismX View Post


    That's true. A couple years ago if I were to buy an Android-baed device I would have chosen HTC as the vendor but today it would be Samsung. HTC simply has no compelling HW. I would also no longer by a WP7-based device from HTC, instead I'd go with Nokia.



    Exactly...hell Nokia is the second best hardware manufacturer out there IMO. Their Lumia series, well the 800 and the 900, is downright beautiful.
  • Reply 12 of 44
    Quote:
    Originally Posted by Technarchy View Post


    In recent years HTC has made 33 different android phones and 17 Windows Phone models.



    That's 50 different phones since 2009 or so.



    That is just a terrible business model from an R&D expense perspective and logistics perspective.



    It's just not sustainable long term, especially when you consider many of those phones will be junk by design.



    Welcome to the thought process a LOT of Androiders have had for a while.



    While we do like choice when it comes to form factor and screen size model names and what not should be simple as hell. One low end model, one mid range, one high end, maybe a keyboard variation of each and that's it.



    But no...OEMs are idiotic IMO.
  • Reply 13 of 44
    mikeb85mikeb85 Posts: 506member
    HTC's products are among the best, but there's some fierce competition. The numbers aren't even that bad, they just couldn't keep up with the pace they set earlier this year. The CEO already said they'll refocus their lineup, and make only higher end products. If you want to see bad numbers, check out Motorola, Sony-Ericsson and LG. HTC just set the earlier bar too high, and disappointed.
  • Reply 14 of 44
    Quote:
    Originally Posted by maccherry View Post


    This always happens in tech. You get the boom and then the bust.

    How long did HTC think they were really going to get away with selling so many different phones a year to the same core audience?

    The entire tech industry is driven on the narrative of selling, "WHAT'S NEXT". But soon they will be asking themselves "WHAT'S NEXT".



    It's really offputting to spend your hard earned cash on the next big thing....then boom, the next big thing is out...I never understood the need for so many models...shit makes no damn sense.



    If Android falters it'll be because of the OEMs...and carriers...Google needs to show their power more.
  • Reply 15 of 44
    Quote:
    Originally Posted by Mikeb85 View Post


    HTC's products are among the best, but there's some fierce competition. The numbers aren't even that bad, they just couldn't keep up with the pace they set earlier this year. The CEO already said they'll refocus their lineup, and make only higher end products. If you want to see bad numbers, check out Motorola, Sony-Ericsson and LG. HTC just set the earlier bar to high, and disappointed.



    Yea that makes sense...I do prefer HTC hardware but they often choose cheaper components...GPUs and whatnot.



    Due to the premium feel of their devices they could've been the golden OEM. lol. but they did too much, too many models...etc.



    Sometimes I swear the whole smartphone industry is retarded...save one manufacturer.
  • Reply 16 of 44
    Quote:
    Originally Posted by AbsoluteDesignz View Post


    Yea that makes sense...I do prefer HTC hardware but they often choose cheaper components...GPUs and whatnot.



    Due to the premium feel of their devices they could've been the golden OEM. lol. but they did too much, too many models...etc.



    Sometimes I swear the whole smartphone industry is retarded...save one manufacturer.



    HTC doesn't choose cheaper components, but they do go with the most supported components (Qualcomm SOCs), over the most powerful brute-force wise. IMO their marketing is the missing piece, they create confusion with too many models. But their quality is spot on.
  • Reply 17 of 44
    Quote:
    Originally Posted by SolipsismX View Post


    Apple's not HTC's problem, it's Samsung.



    Agreed. You have to give Samsung credit. They were a bit of a latecomer, but have taken over the Android market.
  • Reply 18 of 44
    Can anyone, without thinking or looking, name a key distinctive feature of HTC phones?



    I think many people can do so for iPhones and Galaxy S phones.
  • Reply 19 of 44
    solipsismxsolipsismx Posts: 19,566member
    Quote:
    Originally Posted by stelligent View Post


    Agreed. You have to give Samsung credit. They were a bit of a latecomer, but have taken over the Android market.



    It makes me wonder if blatant mimicry is a viable market strategy. This surely works well for predatory and prey in the biological world so why not for business world. We can argue ethics and morales but that's a personal thing and you'd be hard pressed to get enough people on board, especially when the buyer isn't being duped (like with the way financial institutions acted) but when they are merely duping other companies for which the buyer tends to feel they are benefiting.
  • Reply 20 of 44
    Quote:
    Originally Posted by stelligent View Post


    Can anyone, without thinking or looking, name a key distinctive feature of HTC phones?



    I think many people can do so for iPhones and Galaxy S phones.



    Sense.



    HTC's software enhancements to Android are probably the only OEM modifications that actually enhance Android. They developed a lot of the features that Google eventually put into ICS.
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