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HTC announces massive profit drop in Q1 2012, the One series better change things around

April 6, 2012
HTC, the second biggest smartphone manufacturer from Asia, has recently announced a 70% year on year drop in profits for Q1 2012 and a 35% year on year decline in revenues. High Tech Computer’s earnings for the first quarter totaled NT$4.46 billion (US $150 million), down from NT $14.8 billion in the same quarter of 2011. Total revenues for the first quarter have reached NT $67.7 billion.

Fortunately for HTC fans and stockholders alike, the first quarter was always regarded as a transitional one, as it was obviously transpired in a statement made by HTC’s Chief Financial Officer Winston Yung on February 6, when he admitted HTC’s products in Q4 2011 weren’t exactly what their fans expected them to be. The disappointing financial reports are obviously connected to HTC’s lack of response to a couple of devices launched by its main competitors in Q4 2011.

While Apple stole everybody’s show with the release of the iPhone 4S back in October, Samsung was able to keep their sales up with their Galaxy Nexus and Galaxy Note smartphones. HTC was unable to keep up. “We simply dropped the ball on products in the fourth quarter,” Yung said on Feb. 6 “The form factor could be better and the product design could be better. So we’ve learned lessons from the fourth quarter products.”

On the upside, HTC expects much better financial results in Q2 2012, as all their Q1 efforts went into manufacturing the One series of smartphones, recently launched in Europe and several additional markets, and expected to reach the US later this quarter. Sure enough, the HTC’s flagship superphone — the quad-core HTC One X — is probably the best Android smartphone currently out there, but the success of the entire HTC One series also depends on Samsung’s and Apple’s response to the threat. According to Gartner analyst CK Lu: “[…] it’s really about how HTC can compete with the new iPhone and the new Samsung Galaxy, so we will have to wait and see”.

Will HTC be able to turn over their financial fates? Let us know what you think in the comment section below!