HTC has announced a notable financial loss for the second quarter of the year, having released its unaudited results earlier today. The news is not completely unexpected, as HTC has been struggling with poor smartphone sales this year.
The company had been expected to post revenue somewhere in the region of NT$65 billion for the second quarter, but has declared an unaudited revenue of only NT$33.01 billion ($1.07BN) for the quarter ending June 30. This means that HTC will post an operating loss of NT$5.14 billion ($166M) for Q2 2015, plunging the company into a significant quarterly loss.
The second quarter of the year is usually strong for HTC, as it directly follows the launch of its latest flagship smartphone. Such a noticeable loss in this quarter leaves the rest of the year looking pretty miserable for the company.
Last year, HTC managed to return to minor profit after a number of quarterly losses and had been hoping to continue its recovery throughout 2015. However, its latest flagship One M9 smartphone has suffered severely disappointing sales figures since launch, with one report highlighting that shipments had fallen by some 43 percent compared with the last generation One M8.
HTC seems to have been caught out by improving technologies from high-end players like Samsung and the cut-throat pricing models of mid-range Chinese competitors such as Xiaomi. HTC has stated that it intends to focus on mid-tier products to drive up sales, but this market segment is becoming increasingly busy with companies offering flagship level hardware at very thin profit margins, which is unlikely to help HTC’s position.
Along with a reshuffle at the top of the company, HTC has also recently been looking into new markets with its Vive VR headset and portable RE camera. While these may eventually provide a way for HTC to diversity or transition in the future, they aren’t bringing in the short term revenue that the company needs.
2015 is looking to be another tough year for HTC, and its bulging product portfolio doesn’t appear to be cutting through the competition. Can anyone suggest a remedy?