Even with HTC One Launch HTC Profits Decline Drastically

Sara Cunningham May 3, 2013 1
Even with HTC One Launch HTC Profits Decline Drastically

The profits are not the strong side for this smartphone manufacturer. Even though it has launched their new flagship device HTC One, the profits for the first quarter of this year take a huge hit and plunged 98%. Maybe this new device was launched a little bit too late to save the quarter. This company has end up the quarter with $2.8 million profit.

The net profit has sunk from last year’s $152 million to this year’s first quarter makings of $2.85 million. I haven’t even the slightest thought that one company can take on this kind of hit. This is the lowest profitable quarter of this company since 2004. This has been confirmed by the company on Tuesday when earning call was scheduled. HTC didn’t reveal how many HTC One devices were sold but noted that this revenues to jump as high as NT$70 billion during the second quarter.

At the earnings call, the CEO of this company Peter Chou said that last year they thought they need injecting new innovational and exciting stuff to the HTC products and they had perfect opportunity for that. He added that he personally thinks they had perfect launch of the new HTC One device. Referring to the available Android based phones Chao said that they have a goal for developing the brand of HTC to be trustable, excellent and premier because that kind of preference is definitely most important for them.

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CK Cheng, who is an analyst in CLSA, estimated that this company has sold around 750,000 HTC One devices during this month of April. He said that it’s expected, HTC to ship more than 3.5 million devices during this present second quarter. 10 millions is the number mark for selling this new smartphone before this year ends.

I can’t see that this one was expected but HTC One did suffer some delays because of some supply shortages. HTC has blamed the lacking of some available components (Ultrapixel camera). This has caused big shortfall for the total revenue. But, Chou has said that their supply is much improved and they will be supplying even lot more in future. They are noticing very good demand and they have to work even harder now to meet all the demands.

Ernest Doku, a mobile analyst working at Uswitch.com, said that HTC is hell of a profitable company but these reported results are not a great indicator for this Taiwanese company. He added, this delay of the HTC One went of its woes and the other smartphones like the Galaxy S4 has made the appearance of this device slightly unnoticeable.

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