HTC Profits Fall 70 Percent, Company Betting on HTC One X, Evo 4G LTE
HTC is on an industry rollercoaster, rising to new heights last April, seeing profits fall by 70 percent in its 2012 first quarter, and hoping its Evo 4G LTE and HTC One smartphones send it back up the hill.
HTC, following the April 2011 introduction of the Droid Incredible, was hailed as a newly elite brand in the U.S. smartphone market. Boasting quarter-to-quarter growth of 30 percent, one analyst celebrated it as having gone from the edge to the cutting edge. Almost exactly a year later, on the heels of its HTC Evo 4G LTE introduction and HTC One X release, as well as the eve of its fiscal first quarter 2012 results announcement, the company is looking more like a dropout than darling.
HTCs first quarter net income was $151 million, the company announced on its Website April 6, in advance of its full earnings announcement. The figure represents a 70 percent decline from a year earlier, according to a report from Bloomberg, and follows from mistakes made during the quarter before.
We simply dropped the ball on products in the fourth quarter, HTC CFO Winston Yung said during a Feb. 6 conference call, according to the report. The form factor could be better and the product design could be better. So weve learned lessons from the fourth-quarter products.
Apples iPhone continues to sell at a pace that has no mercy on competitors not swinging for the fences, and HTC has additionally lost market share to fellow-Android-supports Samsung, Motorola and LG Electronics. Nokia, with its high-end Lumia 900, which has access to AT&Ts LTE network and goes on sale April 8 for just $100, also hopes to be a market disruptor.
In February, HTC introduced the One, an LTE-enabled device running Android Ice Cream Sandwich and HTCs Sense 4 user interface and featuring a 4.7 display and a 1.5GHz dual-core Snapdragon processor. To sweeten the deal HTC partnered with cloud storage provider Dropbox to offer 25 gigabytes of free cloud storage for two years. Itll come in three flavorsX, S and V.
In a review of the X, a global version and the most powerful, The Verges Chris Ziegler described it as conservatively ¦ the most important event in the companys history since the release of the groundbreaking Evo 4G and a device that oozes HTC from every nook and cranny. Theres no superfluous, counterproductive meddling in the design process from carriers, he writes, suspecting all the extra cooks have been shooed to the dining room.
The Evo 4G LTE, which will go on sale May 7, also runs Ice Cream Sandwich, features a 4.7-inch display and 1.5GHz processor, and will have access to Sprints LTE network. HTCs plans these days, President Jason Mackenzie said at an April 4 New York City event for the device, is to make fewer phones but to make them bettera sentiment that echoes January comments made by Motorola CEO Sanjay Jha, about Motorolas plans for its Android lineup.
In March, HTC reported that consolidated sales were up from February, though still down compared to its year-ago results.
If it can keep up the trend seen in March, Yuanta Securities analyst Bonnie Chang told Reuters, we would expect to see a pretty strong [second quarter].