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HTC sales slowing, profitability hinges on the new One (M8)
Cast your mind back to last year, and the launch of the original HTC One (M7), and you may recall that HTC’s financial forecasts were looking a little shaky. Several important company figures resigned over the situation, including the Chief Operating Officer Matthew Costello. Since then, things have been a little steadier over at HTC, but the company still hasn’t seen a return to its prime.
The company’s sales slowed again ahead of the launch of the new HTC One (M8), which resulted in the company posting its second loss in three quarters. The company’s Q1 2014 loss amounted to NT$1.88 billion ($62 million), which is slightly worse than many analysts’ expected average loss of NT$1.71 billion, and right in the middle of HTC’s own February 10th forecast loss of between NT$860 million to NT$3.11 billion. Even more worryingly, revenue for the quarter fell to NT$33.1 billion, down from NT$42.8 billion over the same period last year.
“The company expects to see positive trajectory of its revenue in April from March and forecasts quarter-on-quarter revenue growth in the second quarter,” HTC
On the plus side, HTC’s March sales figures grew by 2.2 percent over the previous year, and HTC is predicting a return to profit next quarter, based on sales from its newly launched HTC One (M8). However, an analysts at SinoPac Financial Holdings Co. has suggested that, despite the positive figures for March, HTC’s sales are weaker than the company anticipated.
Considering that HTC has just released a range of new products, the next quarter’s earnings report is going to be a crucial one for the company. HTC will be holding its next earnings call in early May, where sales of the new flagship HTC One (M8), as well as mid-range products like the Desire 816, will be a deciding factor in determining whether HTC is capable of turning its fortunes around.
If all this seems familiar, we were saying virtually the same thing with last year’s launch of the original HTC One (M7), which turned out not to change that much for the company.
“The important thing to watch will be whether they can sustain sales into the third month after M8’s product release,” Birdy Lu
Despite a strong line-up of handsets, HTC still appears to be struggling to carve out a large enough market for itself to compete with the likes of Samsung. What do you makes of HTC’s odds of turning things around with its new line-up of handsets?