Briefly: HTC profits drop 26%, Sprint reshuffles business, Motorola misses earningsHTC posted its first quarterly profit decline in two years, as Sprint reorganizes its business structure in efforts to streamline operations and Motorola warns of dismal fourth quarter results amid a proposed Google buyout.
HTC profits decline
Taiwanese smartphone manufacturer HTC posted the results from the last quarter of 2011 on Friday, and saw its profits decline for the first time in two years due to quick growth from competitors Samsung and Apple, reports Bloomberg.
Asia's second-largest handset maker suffered a year-to-year drop in profits in the fourth quarter of 2011, with a $364 million net income representing a 26 percent decline from over $489 million in 2010.
Severe competition at the high end from Apple and Samsung forced [HTC's] sales lower during the quarter, said Peter Liao, a Taipei-based analyst at Nomura Holdings Plc. The key is when they can find their competitive edge, which may not happen until the second quarter at the earliest.
HTC builds smartphones based on both Google's Android and Microsoft's Windows Phone platforms, but more attractive offerings like Samsung's Galaxy line and Apple's iPhone have put a damper on the Taiwan company's sales.
Numbers from a report in early November 2011 placed HTC's sales at the top of the smartphone pile in the U.S. for the quarter ending in October, however the company warned that Q4 would see a sales drop to between 12 and 13 million units. The estimate turned out to be less than conservative as shipments dipped to 10 million units, and analysts expect HTC to move 8.5 million handsets in the January 2012 quarter.
Sprint to merge divisions
Citing a memo released on Friday from Sprint CEO Dan Hesse, Reuters reports that the wireless carrier will be combining its business and consumer units in a move that will leave four top executives without jobs.
As company expenditures increased in 2011 with its commitment to Apple to sell the iPhone and a planned LTE rollout scheduled for mid-2012, Hesse was forced to find ways to bring down operating costs.
As the wireless market has evolved, the lines between consumers and businesses have blurred, Hesse said in the memo, which was first reported by Reuters. Because of the enormous investments were making this year in Network Vision and in the iPhone, we need to consistently be looking for ways to be more efficient.
In the merge, current head of business operations Paget Alves will take over responsibility for consumer sales as chief sales officer, while CMO Bill Malloy will cover marketing for both divisions. As part of the changes, the company's machine-to-machine business will be headed by the current head of wholesale Matt Carter.
The restructuring will push head of customer services Bob H. Johnson, head of consumer marketing John Carney and president of integrated solutions Danny Bowman out of the company. Also leaving is Chris Rogers, an executive who worked in corporate development and spectrum.
Motorola Mobility warns of missed quarterly earnings
HTC wasn't the only victim of poor fourth quarter 2011 sales, as Motorola announced on Friday it expected earnings to miss the $3.9 billion mark analysts were estimating, reports All Things D.
The phone-maker said a it will post "modest profitability," estimating total sales of $3.4 billion off of about 10.5 million devices shipped last quarter. Smartphones accounted for just over half of all shipments.
Motorola is in the midst of getting regulatory approval for a proposed sale to Google, which the company expects to close in early 2012.
The company continues to work closely with Google to complete the proposed acquisition of Motorola Mobility as expeditiously as possible, Motorola said in a statement.