HTC Corp. stands in front of another net loss and this is forcing another reduction of their smartphone prices. While we all expected something new to happen with the new great high-end devices such as HTC One, the overall net loss shows something else. The company made plans about selling their smartphones for approximately $150 on a global level. These plans should return the balance in HTC Corp.’s profit. According to Chialin Chang, HTC’s CFO, these sales with low prices should leave a mark as a major key factor this year. According to the numbers, HTC’s forecast came out lowest since the revenue results in 2009. In order to accomplish bigger results, HTC Corp. is forcing everything on one card and lowers the price to a level which was considered as “too low” earlier.
According to Mr. Chang, HTC wants to compete with these prices: $150 to $200. The cheapest smartphone by this company was sold for $230 in China. This shift comes after failed expectations for the third consecutive time. This is the third quarter in a row HTC revealed a net-loss. They are hoping these lower-cost devices will help them return their profit and cover their manufacturing expenses. This could represent a better chance for those low-cost smartphone seekers to buy the smartphone they desire for a much lower price.
HTC has revealed that they are expecting over $28.4 million for the Q1 ending on March 31st. HTC also revealed that the revenue in Q1 will also fall between NT$34 billion and NT$36 billion. These numbers are significantly lower than NT$42.8, the result from last year. Market analysts have said that bigger competition has made HTC face this turnaround. According to Dale Gai, if they can produce at least 2 models and get them sold, they will get back on track.
HTC Corp. has already announced they want to launch the next gen HTC One smartphone. The gap between the announcement and start of sales will be a lot shorter that we expected. HTC One received really great reviews and we are expecting a really strong selling point. The delayed shipments and the weak consumer market led to low sales. Analysts said that this year’s model could face the same issues.
Could HTC Corp. bounce back?