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HTC Profit Dives Over 90 Percent

Tom Brewster is TechWeek Europe's Security Correspondent. He has also been named BT Information Security Journalist of the Year in 2012 and 2013.

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Is HTC now in the mobile relegation zone with RIM and Nokia?

Taiwanese smartphone maker HTC has issued unaudited results for the fourth quarter of 2012, showing a 91 percent slump in net profit.

The company reported revenue of NT$60.0 billion (£21.5 million) and net income after tax of NT$1 billion for the period between October and December in 2012, down from NT$11.02 billion in the same period from 2011.

In October 2012, the troubled firm reported a profit decline of almost 80 percent for the third quarter.

HTC in decline?

HTC was formerly a maker of unbranded Windows Mobile handets, but was catapulted to the upper echelons of the smartphone market when Google picked it to make the first Android phone on the market, the HTC Dream (called the G1 in the UK) and then subsequent devices such as the Desire.

With more Android competitors – and Samsung in particular – HTC has struggled this year, despite launching some high-end, superpowered devices like the HTC One X, and also backing Microsoft Windows Phone.

Apple and Samsung are now the runaway leaders in the smartphone race, with many analysts predicting the latter will make further market share gains in 2013.

Gartner analyst Carolina Milanesi told TechWeekEurope HTC was suffering due to “undifferentiated products and a weaker brand compared to Samsung”.

“Plus they are only playing in smartphones as their tablets have not picked up any interested so consumers do not see the breath of the portfolio they see from Samsung or Apple,” she said.

“More aggressive marketing will help.”

HTC is currently betting on both Google’s Android and Microsoft’s Windows Phone operating systems to help it make a comeback. It is also planning on launching Windows-based tablets in the coming months, although it has reportedly axed plans for a 5 inch Windows Phone device, due to concerns over resolution quality.

A recent report from Analysys Mason predicted Windows smartphones will account for only 9 percent of the world’s smartphone shipments by 2017, compared to iOS’ 23 percent and Android’s 58 percent

Ronan de Renesse, principal analyst at Analysys Mason, said in December that despite the rise of Windows and Android’s dominance, hardware makers would continue to struggle to compete with Apple and Samsung.

“Value rather than volume has become a priority for top smartphone vendors. It results in an overcrowded high-end smartphone segment with huge marketing budgets,” de Renesse said.

“Keeping up the pace set by Apple and Samsung will be tough and other manufacturers will require a lot of ingenuity, which we are starting to see.”

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