HTC facing tough times in the near future
HTC was the pure emanation of Android success up until nearly the end of 2011 when something in the system broke, and the Taiwanese company stumbled. And that downfall will continue in the short term - the company just confirmed its expectations for lower-than-expected revenues, worsening investors’ fears about lack of innovation.
HTC projected a 36% decline in revenue Q1 2012 to between $2.2 and $2.37 billion (T$65 billion to T$70 billion), down from T$101.42 billion in the previous quarter. The company was optimistic about the long term perspective, though, saying its difficulties were "short term."
This aligns with analysts forecasts as the majority saw old HTC phones not selling well, and new products arriving only in late Q1 2012.
The Taiwanese company is expected to make a big comeback at MWC late this month with a quad-core super slim HTC Ville with a 4.3-inch display, and reworked HTC Sense. Another high-end device it will bring is the quad-core HTC Edge, Barclays Capital said in a report. HTC is rumored to bring four new devices at MWC, and analysts will be watching close the company’s efforts on differentiation.
Margins are also narrowing down. HTC’s relatively healthy 12.7% operating margin is expected to decrease to 7.5%.
source: Reuters
HTC's financial troubles started to show after Q3 2011. Charts courtesy of Asymco.com
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