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January earnings for HTC are in, and they are not good
- HTC continues a free fall as its January earnings report has the company down by 27% YOY.
- The recently closed deal with Google may help it turn around, but things look shaky.
- The company’s investments in VR might be the safer bet from now on.
It’s been a rough few years for HTC. In 2011, the company was the third most highly-valued smartphone manufacturer behind only Apple and Samsung. But increased competition and a string of low-selling devices have left the company gasping for air. Today, it doesn’t even broach the top ten list of global smartphone manufacturers.
Anyone who may have been hoping that HTC could make a comeback in 2018 will be disappointed to hear that the sales figures for January are in, and they are not good. Revenue sank 15% as compared to December 2017, and YOY totals are even worse at a 27% drop.
However, HTC isn’t entirely down for the count yet. In September of last year, Google announced a deal with HTC to the tune of $1.1 billion. The trade was for patents and staff, with HTC handing over about 2,000 engineers (many of whom were already working on the Google Pixel 2 and its future successor) along with some intellectual property, and Google handing over the cash. That deal closed in January.
How HTC will use that massive cash flow to turn itself around is not totally clear. The HTC Vive and the company’s related investments in virtual reality seem like a safer bet than trying to re-enter the crowded and fierce smartphone market with another flagship. Will the HTC Vive Pro and its standalone sister product the Vive Focus, both hitting the market this month, give them the edge? Only time will tell.