HTC Sees Slump Despite HTC One Success

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HTC’s second quarter results contain some positives, but are below expectations

Taiwanese smartphone manufacturer HTC has posted promising second quarter results, but analysts predict a flat third quarter, during which the company is likely to face increased competition from market leaders Apple and Samsung.

Even though the sales of flagship HTC One have boosted the company’s profits to £27.77 million, they still came in below expectations.

HTC alive and kicking

The first quarter of 2013 saw HTC hit a record low, due to serious supplier delays which meant HTC One was launched in just a handful of markets, instead of the planned 80. As a result, the company posted net profit of approximately £1.9 million, a 98 percent drop compared to the same period in 2012.

HTC OneWhen the HTC One finally arrived, it was hailed by the reviewers as one of the best smartphones of this generation. However, the company’s advertising budget cannot compare to the millions spent on promotion by competitors like Apple and Samsung.

Things went better in the second quarter, with profits 25 percent down compared to the same period in 2012, when HTC One X was launched.

According to Reuters, analysts do not expect third quarter growth from the company, since there are just a handful of product launches planned for this period. HTC has also cut back on component orders for the quarter, which shows it doesn’t expect high sales numbers.

In August, HTC will launch the One Mini – a downsized version of its flagship device, hoping it will appeal to customers who have avoided the original One because of its impressive size.

Samsung has also missed the second quarter targets and posted cautious third quarter forecast, possibly indicating the smartphone market as a whole is slowing down.

Meanwhile, the Internet is buzzing with rumours that Apple is working on a smaller, cheaper iPhone – something CEO Tim Cook denied in the beginning of the year.

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