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

Posted:
in iPhone edited January 2014
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.
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Comments

  • Reply 1 of 42
    monstrositymonstrosity Posts: 2,202member


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

  • Reply 2 of 42
    neiltc13neiltc13 Posts: 182member


    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.

  • Reply 3 of 42
    rogifanrogifan Posts: 10,669member
    neiltc13 wrote: »
    <p> Or maybe HTC's profits dropped because everyone knew their new handsets were launching in Q2, so didn't buy them in Q1.</p><p>  </p><p> 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.</p>
    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?
  • Reply 4 of 42
    jeffdmjeffdm Posts: 12,946member


     


    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.

  • Reply 5 of 42
    cnocbuicnocbui Posts: 3,613member


     


    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.

  • Reply 6 of 42
    doh123doh123 Posts: 323member


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

  • Reply 7 of 42
    tallest skiltallest skil Posts: 43,399member


    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.

  • Reply 8 of 42
    neiltc13 wrote: »
    <p> Or maybe HTC's profits dropped because everyone knew their new handsets were launching in Q2, so didn't buy them in Q1.</p><p>  </p><p> 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.</p>

    Peter Chou seems to think otherwise.
  • Reply 9 of 42
    jeffdmjeffdm Posts: 12,946member


     


    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.

  • Reply 10 of 42
    cnocbuicnocbui Posts: 3,613member


    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.

  • Reply 11 of 42
    evilutionevilution Posts: 1,353member


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

  • Reply 12 of 42
    bullheadbullhead Posts: 493member
    So how come Samesung cloner phones are selling and HTC cloner phones are not?
  • Reply 13 of 42


    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.

  • Reply 14 of 42


     


    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....

  • Reply 15 of 42
    tallest skiltallest skil Posts: 43,399member

    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.

  • Reply 16 of 42
    orlandoorlando Posts: 601member
    kingsmuse wrote: »
    <p> Why do they (and others) make so damn many different phones?</p><p>  </p><p> Wouldn`t it allow them to market themselves more effectively with just one or two exceptional feature phones?</p><p>  </p><p> 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.</p><p>  </p><p> 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.</p><p>  </p><p> 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.</p><p>  </p><p> All of the Android phone makers just seem to have a "Lets throw lots of crap to the wall and see what sticks" approach.</p>

    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.
  • Reply 17 of 42
    tooltalktooltalk Posts: 766member


    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?

  • Reply 18 of 42


     


    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.

  • Reply 19 of 42
    jeffdmjeffdm Posts: 12,946member


     


    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.

  • Reply 20 of 42
    tallest skiltallest skil Posts: 43,399member

    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.

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