HTC: profits going down, margins going down, targets going down

HTC: profits going down, margins going down, targets going downWe've been reporting on difficult times for Taiwan's HTC for quite a while now, and sadly we're by no means at the end of the road yet.

The company revealed today its first quarter revenue would be worse than expected, that margins were falling and it now saw the only way forward as reducing its focus on the mid- to high-end and upping its presence in emerging markets.

HTC's revenues are now expected to come in up to 17% lower than the December quarter, which as we reported last month saw a massive 91% drop in net profit year on year.

And with HTC already being forced to trim its margins to compete with Apple and Samsung globally, it now looks like it's shifting strategy (again) to target the fast-growing smartphone market in China, where more affordable devices are far more popular than high-end models.

HTC chief financial officer Chang Chia-Lin told investors today that the company could potentially come in as low as half the price of its current lowest priced handset in China, which goes for 1,999 yuan (just over £200).

“We're going to go down, but not below 1,000,” Chang said. “We see there's still room to play.”

Maybe there is, but it's bad news for HTC fans in the UK. A focus on lower prices means on the one hand lower margins per device in the quest for higher sales. That's likely to not only mean more mass-market handsets from HTC, but also handsets that never make it as far as these shores in the first place.

That said, we've still got the HTC M7 to look forward to, as well as the M4 and G2 apparently. Plus there's also Marketing 2.0...

Via Reuters

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8 comments

JanSt / MOD  Feb. 4, 2013 at 19:20

Downwardly brilliant.
Quietly Beat(s)en etc etc....

Haha00  Feb. 4, 2013 at 20:58

What were they expecting? 1500mAhm battery on a quadcore smartphone? They haven't seen nothing yet....

JanSt / MOD  Feb. 4, 2013 at 21:08

What were they expecting? 1500mAhm battery on a quadcore smartphone? They haven't seen nothing yet....
True - their batteries have been a joke. Even their old HTC HD2 beats their new flagships in that regard. Having said that: a quadcore well implemented can lead to more efficient power use. But it seems they haven't figured that one out, yet :p

Pondlife  Feb. 4, 2013 at 21:52

Well the butterfly was getting good rep for battery.

Doesn't that mean we have cheaper htc phones here than china at times if £200 was lowest til now/

judgey  Feb. 5, 2013 at 01:01

all they needed was an sd card slot and a removable battery

James7756  Feb. 5, 2013 at 03:03

When they went back on updating the Desire HD to ICS as they had promised, backing out two weeks before it was due, they lost my trust, and my future custom, probably forever. I imagine many early adopters who had that phone feel the same.

JanSt / MOD  Feb. 5, 2013 at 08:50

When they went back on updating the Desire HD to ICS as they had promised, backing out two weeks before it was due, they lost my trust, and my future custom, probably forever. I imagine many early adopters who had that phone feel the same.

Yeah - add to that the Beats branding. So, instead of proper software updates, we add software that delivers something very subjective; something the quality of which no 2 listeners will agree on... pffft. On the plus side: they made fools wear big foolish-looking headphones in public. That is a social service one can only applaud.

Pondlife  Feb. 5, 2013 at 17:23

True it does make them easier to spot

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