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HTC disappoints with earnings and forecast

HTC had warned of a disappointing fourth quarter, but the actual results were even worse than expected. The Taiwanese smartphone and tablet maker reported revenue of NT$60 billion ($2.03 billion) and net profit of NT$1 billion ($34 million), down 91% from the year-ago quarter. Without a new device offering during the holiday selling season, HTC saw sales slip. The company says the sales outlook for the first quarter of 2013 is even bleaker.

During the last several years, HTC has transformed itself from a ‘white label’ phone manufacturer into a leading designer and manufacturer of high-end devices. By the second half of 2011, HTC had become one of the top smartphone brands in developed markets, but during 2012 it was overtaken by Chinese rivals ZTE and Huawei.

By the fourth quarter of 2012 HTC was no longer one of the top five smartphone vendors. For the year as a whole, HTC had 4.6% of the global smartphone market and shipped 32.6 million smartphones, according to IDC.

HTC Chief Financial Officer Chang Chia-Lin told investors that the company will shift its focus in China to lower-priced phones. But he said the company will not price its phones below 1,000 yuan, or about $160. Currently, HTC earns less than 40% of its revenue in China, but the company has been working throughout 2012 to increase its penetration of the Chinese market.

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ABOUT AUTHOR

Martha DeGrasse
Martha DeGrassehttp://www.nbreports.com
Martha DeGrasse is the publisher of Network Builder Reports (nbreports.com). At RCR, Martha authored more than 20 in-depth feature reports and more than 2,400 news articles. She also created the Mobile Minute and the 5 Things to Know Today series. Prior to joining RCR Wireless News, Martha produced business and technology news for CNN and Dow Jones in New York and managed the online editorial group at Hoover’s Online before taking a number of years off to be at home when her children were young. Martha is the board president of Austin's Trinity Center and is a member of the Women's Wireless Leadership Forum.