HTC posts grim Q3 2012 results, expects an even worse Q4
Even worse is HTC's operating profit for this quarter, though, which amounts to $167 million, down by the disastrous 76% compared to the same period of last year. SlashGear notes that HTC's operating margins seem to be falling helplessly, with the company's current margin being about 7% and forecasts for the next quarter seeing it at just 1%. Revenues for the next quarter are also expected to fall, reaching $2.1 billion.
Facing such tough challenges, HTC's management has decided to undertake some cutting of the expenses, and as a result, the operating expenses for Q3 are down 29% year-on-year. However, cutting expenses equals cutting valuable investments that would have otherwise helped the company fix its products (or at least they should have helped it).
Thinking about why and how HTC has found itself in such an unfavorable position, we can't help but point at the company's current lineup of smartphones and put the blame on it. It's not a secret that where its phones once shines, they are now overshadowed by its rival on the Android market - Samsung. HTC has tried to find new ways of differentiating its products, but it seems like it has made the wrong deals. For example, HTC's partnership with Beats yielded weak results and failed to attract many customers. The problem is that even though its devices are supposed to be Beats-powered, their sound quality isn't much different than that of the competition. Because of that, this effort by the company ended up being more of a marketing move than some real value for the customers.
The investments that HTC has recently made in its camera technology, which resulted in the ImageSense cameras found on some of its "One" smartphones, have also been a big loss for the company, as the cameras of its new handsets are actually poorer than most of the competition.
HTC is also having great trouble improving its software user interface, the so-called Sense UI. Sense has always been a heavy UI, but at least it was once impressive, whereas now it's just heavy and unoptimized.
It also makes us wonder if HTC is playing the right game right now. A few years ago, HTC managed to do what many would now say is impossible - to breach into Apple's own turf - the mainstream market. The company's early Android smartphones did just that - they turned out to be appealing for the normal people, as they could easily stand out from the rest of the handsets out there. There days, however, HTC has been losing too much resources trying to match Samsung's monster phones, and the rumors of an upcoming HTC device with a 5" screen don't really promise any change in this respect.
1. The.Dark.Knight.Rises (banned) (Posts: 72; Member since: 24 Oct 2012)
Why? Why? Why? Htc makes such lovely handsets why is this happening?
11. MeoCao (unregistered)
I really feel sad for HTC, they have great design, best screen by a mile. Hopefully Butterfly and DLX will help them.
12. Nathan_ingx (Posts: 3049; Member since: 07 Mar 2012)
Minimal power in battery department could be one of the many problems.
There's hardly any HTC phone that hit the 2500mAh mark. That's really disappointing...
36. JC557 (Posts: 1182; Member since: 07 Dec 2011)
Not really as their phones can last a decent amount with the small sized battery.
It was probably a combination of that and marketing with marketing playing a bigger role. Samsung and Apple are at the top and it was mostly due to their marketing and hype.
Maybe this will be the much needed wake up call for HTC to consolidate their lineup and retool their design.
16. Retro-touch (Posts: 265; Member since: 24 Oct 2011)
HTC made bad choices and are suffering for it, they gave up on lower/middle range handsets, and their high end handsets are pricy and offer little value compared to competition. They should remove sense UI or make it minimalistic as possible cause its really offering them nothing atm, people want better optimized and fast software not something that kills the Android experience, they should make better cameras for their phones and quit with the beats gimmick, it simply increases costs of handsets with no added value and last they should put sd card slots and bigger battery cause HTC phones always have poor battey life
18. redmd (Posts: 935; Member since: 26 Oct 2011)
many are put off by the absence of non removable battery, the lack of micro sd slot. these are sacrifices to achieve that premium build.
Or Samsung is just the better performer of the lot regardless of that cheap plasticky build.
I suggest HTC should stick to quad Krait and release the best they could come up on every carrier. they should also take care of the low and mid range and target first time smartphone buyers.
26. Commentator (Posts: 2577; Member since: 16 Aug 2011)
I'm not sure about the rest of the world, but HTC absolutely botched its One line release in the US. No carrier has the same version, whereas Samsung managed to push the same Galaxy S III to each carrier. Also, HTC has virtually no marketing. Of the four big carriers, only AT&T actively advertized their HTC, on TV anyway. On the flip side, Samsung has been airing GSIII commercials like there's no tomorrow. I can't tell you how sick I am of seeing that faux-Apple iPhone line with the two douches who bump their phones together. It works though. I've been asked several times if my Evo is a Samsung Galaxy. HTC just doesn't have the resources to compete on Samsung's scale.
37. lsutigers (Posts: 785; Member since: 08 Mar 2009)
Sprint advertises the EVO 4G LTE quite a bit, which is a fantastic phone and IS selling well but it can't be the only device supporting HTC. The only thing the EVO is missing over the SGS3 is the removable battery, it has all of the extra features the One X doesn't have like bigger battery and Micro SD card slot. Hopefully the Butterfly J / DLX will sell well but with the Samsung Galaxy S Note II, it will be a difficult task.
I do agree with you though, HTC just doesn't have the resources to compete with Samsung.
33. Doakie (Posts: 1381; Member since: 06 May 2009)
HTC release all your flagship phones on all carriers that will fix all your problems! That one bit of advice would save this company.
34. Blitz_Panzer (Posts: 8; Member since: 21 Sep 2012)
Publicity, Samsung invert millions... and HTC don't... So be it... In benchmarking and with the same OS Version, HTC ONE X had a better performance than SIII for example...
2. Galen20K (Posts: 517; Member since: 26 Dec 2008)
this is really sad, I remember when just about every new phone I got was htc. remind me "again" why they would keep your Highest end phone an exclusive in the USA for the second year in a year.......? because honestly, it looks as if they could uses the sales in each major carrier.
3. PapaSmurf (Posts: 9092; Member since: 14 May 2012)
Its sad to see HTC struggling. Once a powerful tech giant is having trouble with revenue.
5. someones4 (Posts: 621; Member since: 16 Sep 2012)
i keep having this thought: buy htc , samsung.
then you can get those annoying jerks calling your product cheap of your back
6. RaKithAPeiRiZ (Posts: 1399; Member since: 29 Dec 2011)
Just wait till Chuck Norris buys a htc one x , all profit margins will suddenly go beyond expectations for atleast 10 centuries
7. wendygarett (unregistered)
Wtf only 1% of margins?? Just exit the handset market already...
10. wendygarett (unregistered)
Lol that person is my big cousin... Not me, but I will lol :)
24. Commentator (Posts: 2577; Member since: 16 Aug 2011)
Exit the handset market and do... what, exactly?
28. wendygarett (unregistered)
How can you make a phone with only 1% of profit margin to the customer?
30. Nathan_ingx (Posts: 3049; Member since: 07 Mar 2012)
Try counting how many numbers of phones constitute the 1%. You'll lose your count i'm telling you.
9. muhsen (Posts: 272; Member since: 07 Jun 2012)
nokia is struggling(trying to come back with wp and they will probably make a come back) because of symbian,Rim is struggling due to old bb os (and trying to come bb10 which can port android apps easily and it is really promising)
htc is using the best os's any OEM can use(android and wp where ios can only be used by apple) and it is struggling,now that's really confusing
25. darac (Posts: 2156; Member since: 17 Oct 2011)
It's not confusing .. HTC was caught sitting on laurels by the Galaxy S 2, and is playing catch up ever since.
S3 is simply a better phone than the One x - better software, better support, better and removable battery, expandable storage..I went for the S3 over the One x even though it costs more.
Also, Galaxy s2 took away a lot of people from One s for the same reasons
13. adjou (Posts: 102; Member since: 06 Jul 2010)
HTC need to change their design, might be the reason that is hindering them. The look is nice... 2 years ago, but now its just over used.
@someones4, samsung uses plastic and htc uses metal, so which product is cheap?
14. bubbadoes (Posts: 384; Member since: 03 May 2012)
I gave HTC a chance with the Thunderbolt..From a 2 hour maxx battery life, reboots, no 4g/3g connection without toggling between airplane mode--I gave up on my HTC phone and never looked back and I probably want either. Reason why--the sub par customer service I received from HTC with all of the problems I had with my phone- the only resolution they had for the Thunderbolt was sending me another one when indeed they knew before hand they couldnt fix that plaqued phone--eventually I got Verizon to send me a Charge...which was a little bit better, but not by much.Fortunately, those days are behind me because I have no issues to date with my GS3. So a long story short, HTC should have seen this coming, but they thought they were the only guys in town producing a smartphone, but in turn LG, Motorola and Samsung have been leading them since the Thunderbolt...Interesting to see how the new phablet will turn out on Verizon--looks like a small battery to me though trying to run a 5 inch screen, keep it bright and also connect and stay on a LTE network....mmmmmmmmm
15. lzsbleach (Posts: 155; Member since: 20 May 2012)
My first phone was an HTC but I got bored of it real quick and then swicthed to Samsung and never looked back. Theres nothing wrong with there phones and there pretty good its just that there missing something important, and it shows in there sales; There branding also sucks the same phone on 4 different carriers with different names. The Samsung GS 3 on four different carrires and each one is promoting the hell out of it and thats why there doing so good.
19. Retro-touch (Posts: 265; Member since: 24 Oct 2011)
After a series of poor devices its not really surprising, Samsung are doing well cause since the SGS1 they have been improving their designs, software, marketing and availability worlwide, it would take similar blunders as HTC for people to lose trust in Samsung as a manufacturer and flock to others. LG is a company taking a positive turn, they are releasing the Optimus G and Nexus and if they don't screw it up are poised to improve their reputation, I think they may become big soon
17. Einstein333 (Posts: 41; Member since: 22 May 2012)
I really wonder why they don't do better. I think their smartphones are among the best out there and they feel much better in your hand than the Samsung phones with their cheap plastic construction. Personally I have the HTC ONE S and I must say this is the best smartphone I ever had (had Sony and Samsung before)...
27. darac (Posts: 2156; Member since: 17 Oct 2011)
One s is nice, but I find its screen to look horrible - was actually shocked at how jagged and pixelated it is, when I first saw it.
20. psysect (Posts: 49; Member since: 27 Sep 2012)
becuace people choose blind samsung samsung samsung!!!
htc has best build quality & the best screen & design but a reason that they dont winner..
they dont have enogh propagandize when sumsung is advertisung every where every time on the tv on the wall one the billbord in subway wall & soooooooo many places ..
HTC plz bring to much advertising for big your products u will winner next time..
i love HTC & very satisfied of these products.
21. psysect (Posts: 49; Member since: 27 Sep 2012)
but i forgot a Point!!
battary is very important and it can perfect your product..use high capicity battary & u will see to much sales.
22. Cyan3boN (Posts: 431; Member since: 23 Feb 2012)
love u HTC. u make great phones. I will always be your valuable customer.
23. Captain_Doug (Posts: 820; Member since: 10 Feb 2012)
Best phones I've owned have been HTC. Hopefully this just motivates them to stop being Verizon's B*tch. They have great build quality, great design, their phones last a long time, and they suport unlocking bootloaders.
29. lubba (Posts: 1313; Member since: 17 Jan 2011)
They have the new butterfly. So far, they have already bungled this. One, the s**tty name. Two, its only available on Verizon. Three, there is no real advertisement, or anticipation.
31. darkkjedii (Posts: 13543; Member since: 05 Feb 2011)
That sucks! Htc makes some sweet devices. I love the one x.
32. darkkjedii (Posts: 13543; Member since: 05 Feb 2011)
Htc needs to create a solidified brand across all carriers like apple, and Samsung have. After the gs1, and gs2 Sammy unified its brand, and look at it now. Apple did it from the jump, never allowing carriers to bloat it and brand it or make it look different per carrier. As a result iPhone, and galaxy s are the two most recognized brands. Htc should follow suit, cuz they do make great phones but each one is too different based on who carries it.
35. someones4 (Posts: 621; Member since: 16 Sep 2012)
Almost impossible for htc to compete..just saying the facts.. kudos for them to break into apple's turf but now they are just flailing around..