HTC's final Q4 report paints a blurry picture, Samsung's margin now second only to Apple
What's much worse, the operating margin of the company shrunk from 14.86% to 12.71%, which places Samsung firmly at second place after Apple now. HTC made roughly $440 million profit last quarter, but its year-on-year profit jumped 57% to $2.1 billion.
HTC attributes all these not-so-stellar results to the transitional period it is going through now in terms of developing a new product portfolio for 2012, and warned that the first quarter of this year will be even worse, with operating margin shrinking to the pretty low 7.5% in Q1. The company will also be streamlining operational expenses this quarter to improve profitability, so we should hopefully see some bottom line changes starting in Q2.
Still, despite the comments that it will try and shrink its portfolio to a few "hero" status devices, at the same time HTC claims in the Q4 investor presentation PDF in the source link that it will try to penetrate the mass market and strengthen its presence in emerging markets in 2012. These are high volume-low margin efforts, which will inevitably affect the operating margin further downwards.
source: HTC (PDF)