Friday, July 06, 2012, 05:45 am PT (08:45 am ET)
HTC profits plunge 57% in face of Apple injunction, European strugglesWhile Apple's competitor Samsung expects to see record profit from the June quarter, rival HTC is struggling in the face of disappointing sales in Europe and an Apple injunction that delayed the launch of new handsets in the U.S.
HTC expects that its second quarter net profit will drop by 57 percent to $247.7 million in the June quarter, less than half what it earned in the same period a year prior. That number was also significantly below what market analysts expected.
The Taiwanese handset maker blamed poor economic conditions in Europe, according to Reuters, for its disappointing sales. In addition, HTC saw some of its phones held up by U.S. Customs after Apple was awarded an injunction for patent infringement.
While HTC struggles, another smartphone maker that primarily sells Android handsets, Samsung, expects to see record profits from its June quarter. This week Samsung provided guidance for profits of 6.7 trillion won ($5.9 billion) from the three-month span, handily besting its previous record of 5.85 trillion won from the first quarter of this year.
While Apple and Samsung continue to see record sales, HTC has languished and failed to compete with the two companies in the high-end smartphone market. In April, HTC announced that its pre-tax profits fell by almost 70 percent, while total sales also fell by almost a third.
HTC's One X smartphone
According to IDC, HTC was the fifth-largest smartphone maker in the world in the first quarter of calendar 2012. Its 6.9 million shipped smartphones were behind Research in Motion (9.7 million), Nokia (11.9 million), Apple (35.1 million), and Samsung (42.2 million).
HTC hopes that its newly launched One X smartphone will give it some traction once again in the high-end smartphone market. It's an Android-powered device that features a 4.7-inch 720p high-definition display, with a 1.5 gigahertz dual-core processor and 4G LTE high-speed data connectivity.
While Apple and Samsung compete at the top of the market, an accurate comparison of actual smartphone sales is impossible, as Samsung does not provide such data. Apple discloses iPhone sales in its own quarterly earnings report, which the company will do again for its June quarter on Tuesday, July 24 at 2 p.m. Pacific, 5 p.m. Eastern.
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