HTC's final Q4 report paints a blurry picture, Samsung's margin now second only to Apple

HTC's final Q4 report paints a blurry picture, Samsung's margin now second only to Apple
HTC just outed its final Q4 and 2011 financials, and its winning smarpthone streak seems to have been ended last quarter. It did warn that the results will be down in the dumps for a quarter or two due to product transitioning, and indeed it made about $3.4 billion of revenue in the holiday Q4, compared to $4.6 billion in Q3.

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)



1. snowgator

Posts: 3621; Member since: Jan 19, 2011

I am not to worried about HTC. They had a very strong surge the last couple years, and a couple of down quarters will happen. That being said, I did not love the Sense version on Gingerbread. It was the first time Sense seemed to detract from the Android experience. They also took some risks this year. The Vivid on AT&T was a "love it or hate it" type of design, and most people seemed to think it was ugly. The Rezound got good word of mouth (I haven't tried it myself, so no idea), but it's "Beats Audio" angle was a "love it or it's a gimmick" type of niche device that didn't exactly soar off the shelves. Bet we see some more conservative choices from them this year.

10. cheetah2k

Posts: 2290; Member since: Jan 16, 2011

You're right, but I think it goes deeper than just carriers. The honeymoon period for the aluminium unibody design is over, as well as S-LCD, Qualcomm CPU's and consistantly jibbing us with 768Mb of RAM... Samsung have really stepped up their game, and HTC has to react. I think the Sensation XE with beats was a good reaction to the Galaxy S II, but they really need to think outside the box, be aggressive, and try to move forward, not sideways in competition with Samsung.. The bottom line is - you have to ask yourself the big question - why is Google using Samsung instead of HTC for the Nexus range??.

12. ladyhaly

Posts: 106; Member since: Jan 17, 2011

This is sad for me--- the part about the aluminum unibody, I mean. I love my phone being made of metal. I don't like it being as light as Samsung's phones because it doesn't feel premium in my hand it easily slips off... So easy to be unaware of the phone and just drop it. :/

13. ladyhaly

Posts: 106; Member since: Jan 17, 2011

And yeah... I've been asking the same thing, too. I was surprised because the Sense UI as a whole organic experience seemed so... natural and intuitive for Android. I'm surprised Google didn't just buy HTC. I wonder why..?

2. andro.

Posts: 1999; Member since: Sep 16, 2011

HTC is in a spot of trouble and its generally due to it resting on its laurels. They had a great 2010 with the desire,desire hd,wildfire,evo etc propelling them to the top but 2011 was really a stagnant year where they released several lines of phones all looking the exact same as each other and not overly innovative in design,much behind other manufacturers models which were pushing the boundaries in design and innovation and also they had phones like the desire s which was essentially an 'iphone style' upgrade where it was a minimal upgrade from the previous years model. Also as good as htc sense was or is,it has failed to develop much over the space of the last few years. For htc to reclaim their high ranking they need to unveil much better and innovative phones this year.

3. darac

Posts: 2156; Member since: Oct 17, 2011

so despite of all that they scored 440 million profit ? could've been much worse

4. gallitoking

Posts: 4721; Member since: May 17, 2011

it seems that Samsung wlil be the last standing... with LG out and soon HTC,,Moto will be Google guinea pig.. and will not go anywhere...

5. remixfa

Posts: 14605; Member since: Dec 19, 2008

gallito, everyone has a bad time, even your all mighty apple. if you can go up, you can go down.. but the beauty is, if your smart, you can get back up again.

6. gallitoking

Posts: 4721; Member since: May 17, 2011

true.. but in the mean time Apple is making the most. and are the only ones with iOS and have no competition and HTC also competes with LG, Samsung and Moto... more difficult to stand out...

9. remixfa

Posts: 14605; Member since: Dec 19, 2008

which is why android is ahead. more competition breeds a better product. Thats how apple became a nice product vs microsoft (but still not as good over all), thats how samsung went from a cheap phone manufacturer to the maker of the best stuff around, and thats how android is beating iOS. competition with iOS and with itself.

11. cheetah2k

Posts: 2290; Member since: Jan 16, 2011

Apple is definitely playing catch up to Android right now. Why else would they be suing Samsung and the rest.... Easy answer is to slow them down...

7. AndresJ

Posts: 48; Member since: Feb 06, 2012

HTC? how the hell this company floats on water, everyday you read something bad about HTC or RIM.

8. ngo2dd

Posts: 896; Member since: Jul 08, 2011

440 million is floating on water?

14. ladyhaly

Posts: 106; Member since: Jan 17, 2011

Take note, AndresJ, that that's just the PROFIT.

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