HTC, with its popular Android-running smartphones, blows past estimates with second-quarter net profits of $269 million and shipments of 5.4 million handsets.
Like rival Motorola, HTC is finding that
closely aligning its smartphone strategy with Google's Android mobile operating
system makes good business sense.
When releasing HTC's second-quarter
results July 29, company officials said earnings rose 33 percent year over
year, and they announced a number of promotions and new positions that have
been created within the company to foster future growth.
During the quarter, HTC saw net profits
of $269 million, according to the Associated Press. For the six months ending
June 30, the Taiwan-based smartphone maker posted revenue of about $3 billion.
Gross profits for that period were $911 million.
HTC saw particular strength in its
smartphone business. U.S.
consumers have shown their approval for HTC
smartphones such as the Dream, Hero, Magic, Droid Eris and most recently Droid Incredible.
During the quarter, HTC
shipped a total of 5.4 million handsets-by
far beating both its first-quarter total of 3.5 million handsets and its
prediction of 4.6 million for the second quarter.
Rival Motorola has also followed an Android-heavy strategy, with a product
line that could be easily confused with HTC's-it
shipped the Motorola Droid before the HTC
Droid Eris and the Motorola Droid X after the HTC
Droid Incredible. The same day as HTC's
earnings announcement, Motorola
reported quarterly shipments of 8.3 million handsets,
2.7 million of which
were smartphones. Facing current demand, however, HTC
has had a difficult time meeting orders.
Peter Chou has heard from me probably more often than he'd like to,"
Sprint CEO Dan Hesse said during the
carrier's fiscal second-quarter conference call with analysts and media. Hesse
added that the problem, not specific to HTC,
is a worldwide shortage of parts, particularly of chips and displays.
Working to address the issue, HTC execs
announced during the company's earnings presentation that the current
production rate at its Taiwan facility is up to 2 million units per month, and
during the third quarter the company plans to get production at a plant in
China up to 1 million units per month, for a total production of 3 million
devices per month during the fourth quarter.
The ramping-up at HTC may have, in part,
been a catalyst for some of its newly created positions.
"As the smartphone industry expands at this lightning pace, it is
essential for HTC to grow its management
capabilities from within while also adding outside expertise," Chou said
in a separate July 29 statement.
Former Sony Ericsson CTO Ron Louks-part
of that "outside expertise"-is now HTC's
chief strategy officer, responsible for driving new initiatives and
"technology incubation" and working closely with HTC's
engineering and operation departments.
Kouji Kodera, also formerly of Sony Ericsson, is now HTC's
chief product officer, and David Chen, brought up through the HTC
ranks, is now the company's chief engineering officer, in charge of pushing
forward product development and engineering. Jason Mackenzie, formerly vice
president of HTC North America alone, is now
also responsible for Latin America, and Florian Seiche
is now president of HTC Europe, Middle
East and Africa.
"Today's announcement is not just a signal of our current growth and
progress," Chou said, "but of our vision for bringing unique
smartphones to people all over the world."