HTC’s Q3 2012 profits down 79%, looks like the market doesn’t like the One series

October 8, 2012

HTC has just reported that profits for Q3 2012 are down 79% from the same quarter a year ago. That’s brutal, but it gets worse. They say that revenues for the quarter, meaning how much money they’ve taken in from selling hardware, are down a whopping 48%. Why is this happening? Let’s take a step back to early 2011 when HTC announced the Sensation and Samsung announced the Galaxy S II. Samsung’s device was clearly superior, so HTC, which made a name for themselves with the Desire back in 2010, saw their market share decline. The same thing happened in 2012. HTC announced the One X, Samsung announced the Galaxy S III, and consumers decided that the Galaxy was simply better.

Is the recently announced HTC One X+ going to fix things? Not really. It’s the same One X from February, but with a black case and 4G LTE support. There’s also a bigger battery, but forget about that for a second. Samsung’s Galaxy Note II is just now launching in Europe, and it’s going to land in the US in the next few weeks. How many people are going to pick that up instead of an HTC device?

Several months ago, an email written by HTC’s CEO, Peter Chou, leaked out. It said bureaucracy is taking over the company and slowing it down. That’s obviously what’s happening here. HTC just isn’t moving fast enough, but then again can they? Qualcomm, who owns a share of HTC, simply can’t move as quickly as Samsung, who not only designs their own chips, but also manufactures them using their own fabs. In other words, Samsung already has a supply chain setup, from chips to devices, whereas HTC has to depend on multiple external parties. Each additional party just adds delays.

Can HTC turn things around in 2013? We don’t think so, but we do hope we’re wrong.

Comments

  • azsxdc

    The Galaxy S III could have been worse than the One X and it still would have sold more. Samsung has pretty much made the S III the phone to get if you want an Android phone. Just like Apple did with the iPhone. Combine the the strong brand identity with their strong marketing attempts and HTC never stood a chance.

    I thought HTC was going somewhere when they decided to consolidate their lineup only to see them launch so many variants of the One line, One X, S, V, SC, XC, X+, XL, VX…

  • kitpogi

    This definitely saddens me to see HTC go down this road. I so badly want HTC to come back as King of Android like they were before Samsung started evolving. I will still choose HTC over Sammy in the future but it just makes me want to look for another company worth the competition…Sony is looking pretty good right now…sad for HTC…

  • http://twitter.com/ClarkKent113 Kal-El

    Inking exclusivity deals with carriers is also completely idiotic. I’d put a large share of the blame on that and not on supply-chain issues.

    I know of a lot of people who wanted a One X but they were on Verizon, or T-Mobile, or Sprint and weren’t going to change over the ATT for one phone. Hell, I was even considering picking up a One X+ when the plan was to have it come out for T-Mobile & ATT. Well at the last minute it appears HTC signed an exclusivity contract with ATT and now the One X+ is all theres for the foreseeable future.

    Absolutely infuriating that HTC is digging their own grave with these stupid exclusivity deals when they could be turning things around by releasing their high-end devices on all carriers with all the same specs JUST LIKE SAMSUNG DID WITH THE GS3 & NOTE 2. And both of those devices are/will sell like hot cakes.

  • saurabhaj

    HTC should know wher the problem lies,
    Samsung galaxy fans know that there will be only one S flagship a year,
    but what in Htc,
    they announce one flagship in february,
    and rumours starts for next flagship in august,
    Htc should stick to one flagship a year,
    don”t bring devices like OneX+,one xl,

    • TMOTECH

      Or if they do maybe another carrier like T-Mobile should get a whack at it instead of another exclusive with big Blue.

  • EKfine

    1 flagship a year. or two but make the other one with ext sd card and removable battery! =)

    • mrband

      Exactly! I like materials from HTC better than Samsung, but without microSD and removable battery, no thanks. I don’t want an iPhone with Android.

      • Sondre Krumsvik

        Don’t forget the phsycal keyboard. That thing should be used a lot more!

    • John A

      Same as! I would have gone for the HTC One X, but because it didnt have a removable battery, I didnt.

      • CellPhoneViking

        I did the same thing. In May i was going to buy a new phone, had 3 HTC
        mobiles. I went for SGS3 cause One X didnt have removable battery and sd
        card slot. I love HTC but unless they change that Iphone mobile im not
        going back…Sadly:(

  • hoggleboggle

    like others are saying, reinstate support for microSD and have a user replaceable battery and you will do a lot better. Actually investing in some advertising would also help.

    • http://twitter.com/danmcsw danmcsw

      Agreed.
      Also the kind of advertising that HTC did this year is useless. Although it is rather ironic that HTC chose to advertise the OneX by doing a skydive.

  • Adam Smith

    Maybe they need a nexus phone to rescue them. Poor HTC :(

  • Sondre Krumsvik

    Here is a buisness plan:
    1. Flagship with better spesifications than the rest of it’s brothers
    2. One buisness phone (full QWERTY, but with nearly up to date specs, not a single core)
    3. One phone that can take a beating (like the motorola defy+, I think dualcore should be enough)
    4. One cheap phone with pathetic spesifications (1 ghz MINIMUM!)

  • TMOTECH

    The market loves the one series. The problem is they released the One X on At&t exclusively, the One S on T-Mobile exclusively and created a One X variant for Sprint only. On top of that they did not advertise them like they advertised previous models and Samsung really hit the public hard with some real witty and compelling advertising. If they want to win they have to stop signing exclusivity contracts and let the masses know about their products. Simple as that. I don’t think SD and battery is as much of an issue as most think.

  • joeljay1

    Yes! Others have nailed it when saying HTC’s biggest fault was leaving out the expansion slot and removable battery. I’d like to know why they thought it was better to leave their One series without the 2 main factors that people take into consideration when buying a phone. I would’ve totally upgraded to a One S with T-Mo but went with the S3 for that very reason. Please get back into the game, HTC! Samsung is great but you have the potential of being even better!

  • http://www.facebook.com/raul.torres.3388 Raúl Torres

    I really hope that HTC bounce back and stop making wrongheaded decisions that are like shooting themselves in the foot. I own both and HTC One X and an SGS3 and can say the One X is the better product. So why did I buy an SGS3 in the first place? 2 things:battery life and SD slot. Those things do matter in terms of buying decision so when deciding between Samsung or HTC I went and got an SGS3 to replace my Desire HD. But then I realized that the SGS3 bluetooth did connect well with my car stereo. Unfortunately just the second week after I had the SGS3, which I found a bit harder to use, I dropped it from pocket height and the screen cracked, so now I’m stuck with it and couldn’t return it. Fortunately my provider was able to give me the same discount for the One X as if I was getting on a new 2 year contract and I bought it.
    The One X is beautiful feels like quality and the software works great (except the calendar). Too bad that it does not have a a swappable battery and SD card, and the screeen just guzzles juice like mad. These 3 issue are really most relevant when traveling. So that is why I am using the One x every day and the SGS3 when traveling, which I admit is a bit crazy.

  • jay

    Well I’m one X HTC customer, no qwerty, no HTC, no Money.
    Shame as I once did recommended them, hence why most of the customers I support had HTC’s.
    Not been the case since the Desire Z was released. I moved away and stopped recommending them. As did many engineers I know. The QWERTY market has never been the biggest, but consider who purchased them!
    People whose opinions counted when recommendations were requested in Business. Clients may not have bought the QWERTY’s but the name HTC by that point was prominent. Now recommend clients to choose any high spec phone they like the look and feel of with android. whatever the brand!
    HTC will never regain the position they once had, all they now can do is try and learn from their mistakes ( lack of qwerty, non-removable battery, badly positioned SD ports, Micro SD. Almost as if they have forgotten their strengths) and recover, if it at all possible, but believe it is too late for them, such a shame. Did love their phones and remained loyal to them as long as they were loyal to my requirements. RIP HTC

    • jay

      Sorry USB not SD

  • Swoosh

    HTC also needs to go to more carriers. AT&T the only one to get the one x? I know friends that would love a awesome HTC on Verizon . 3 Simple things will make HTC better in the US.. Removable Battery, MircoSD, More Carriers… They have one of the best build quality and a descent UI…

  • Glenn

    HTC is quietly brilliant – but too quiet! And way too confusing. After having spent a few years in the industry serving multiple carriers selling/servicing multiple brands (and even before these years!) I have been an HTC fan. However . . . from my various points of contact I feel there are some things that can be much better with the brand. They need to look at their catalogue of devices from the street eye view. If someone actually bothered to spend time asking people browsing in store locations that carried various brands and various carriers what phone they had in mind “before” they stepped into the store . . . they would find that most ( I didn’t say all!) punters remember names that are easy to remember that seemingly have been talked about in their circles of life. (Do you know many people who don’t know what you’re talking about when you mention the BMW 3 Series? – even people that dont know will say they do!) and those names have “what is, what’s next and what’s new” built into them. Galaxy SII or iPhone 4s are almost household names thru multiple generations. HTC Sensation (albeit a great phone) has no tie to the past or the future – everyone loves to know they made a great device decision (the past fortified) and there will be an exciting new model coming up (the future fortified). “Sensation” has one shot at showing it’s value and finesse as a device and is then gone in a puff of device release frenzy – then what? The HTC blah blah blah gets released, which may be an evolution on The Sensation but only the “in” crowd know that, and the general punters who actually buy the phones, either don’t know that, don’t give a toss to know that, or never really read the tech release info on C-Net etc to find anything out – they “do” want what’s cool, what works well, what won’t be ostracised at their local bar or church or school sports venue.
    The early Galaxy series was originally awkward, it made it hard to sell . . . across the carriers they looked different – regular people, you know, the ones that actually buy the phones we’re astounded, or confused, or bewildered why this was the case and largely made them step “back” not forward into a sale.
    The HTC One series, take that for instance, Three different iterations? Why? For what street level purpose? I want the X, but my carrier sells the S version only! Why? ( I know some of the reasons – but to the street level guy, it’s just stupid) The punters always walk away from something that stutters to define itself, scratching their earlobes, and buy a new Galaxy SIII from their existing carrier – it’s an advancement phone – it’s in the name – it wont get them in trouble somewhere down the road in their life, they dont have to stand in the store for an hour while their whole cell phone life/family plan goes through the porting process to get swapped to another carrier. They dont know why it takes so long . . . they just hate it.
    What if Ford all of a sudden called the Focus a new name, but it was an evolution of the last Focus? How long did VW America stick with it’s stupid idea to look backwards to a time only old people remember and call the brilliant Golf the “Rabbit” again. Did that lady get fired?
    HTC needs to take a leaf out of the auto industry, the Apple and the Samsung book – stick to a name that has past recognition and future excitement and expectation built into it. Leave the names to the entry level phones because almost no-one remembers them much at all – even then a recognisable lower level tag could help there too – the BMW 1 series for instance.
    HTC could do well to step up it’s advertising too, but not until it’s models are less confusing to the general street level punter.
    The people that know everything about each model before making an informed decision are not a great enough marketbase for profit – doesn’t mean the phones can be crappy or not evolving, it just means a simple moniker that denotes evolution through time works. 3G, 3Gs, 4G, 4Gs, 5 . . . generally people thought the 4G was a phone that ran at 4G data speeds – nope it was the 4th generation iPhone – it sold in brilliantly – simply on the name. The Galaxy SIII sold in round the world brilliantly – on the back of the Galaxy Grain? No . . . the SII! Get my point?

    The HTC One X+ should be available across the carriers, same shape, similar colors. This will encourage accessory developers to actually develop solid accessories too.

    The One X+ is likely to be a brilliant flagship device – for the entire industry! But how will the people know that? The general public? HTC seems to have to start from scratch every time it launches another device – quietly brilliant is too true, for the wrong reasons!

  • AStarbucks

    Its amazing how:
    1) stupid people get duped by marketing
    2) stupid people blame HTC’s problems on poor marketing
    3) stupid people kid themselves that HTC products fail despite being better looking

    Consumers are way smarter than that, or at least compared to the categories of consumers mentioned above.

    Why do you need ads in this information age when you can compare specs and see reviews? You still live in front of a dumb TV? The more marketing associated with a product, the higher the price geddit? You pay for the very ads you are made to see.

    HTC products are being rejected because they have inferior specs and designs. Period. They are no better looking than Samsung’s products. Anything else is just denial. HTC has inferior components which are generically sourced from other manufacturers that’s all. LCD displays? C’mon, wake up and see what Samsung’s AMOLEDs have to offer. 3rd party Tegra/Qualcomm chips? That’s why HTC’s cost is high and margins are declining.

    The worst things are self-inflicted. Sealed non-removeable batteries and no micro-SD cards are deal breakers for most. Who do they think they are? Apple? Didn’t they see how Apple has gone into terminal decline because of such crippling limitations (amongst other things of course). So why follow a failed model?

    BTW, I used HTC for 7-8 years until I went Samsung when they pulled ahead with their Galaxy S series!

  • sp bharath

    i think the less interest towards htc phones by india people is because they have no confidence on those phones wherre there r no servicing centres abundantly