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HTC revenues down 27%, blames competition

HTC lowered its guidance after missing analysts' expectations and reporting a 27 percent drop in revenues and a 57 percent drop in operating profits. The company's slide is being blamed on increasing difficult competition in the smartphone arena.

HTC was once a rising star, posting regular sales gains as a primary, higher end Windows Mobile licensee. It then partnered with Google in 2008 to introduce the first Android phone, Dream/G1, and has since continued to produce both Android and Windows Phone 7 models.

However, unlike Samsung, HTC primarily makes only higher-end smartphones, putting it into direct competition with Apple, the only other mobile vendor focused exclusively on the premium smartphone market.

HTC has also streamlined its product mix to be more like Apple, creating the "HTC One" to replace a series of confusing, overlapping smartphone models.

While Samsung recently reported sales of twice as many smartphones as Apple, it earned only half as much money because the company relies upon sales of low end models. Of the 52 million devices Samsung was estimated to have sold, only 10 million of those were its top of the line Galaxy S III.

All of the 26 million smartphones Apple sold were iPhones, and most of those were the newest iPhone 4S.

HTC continues to cite "intensified competition in the smartphone market" as a primary threat, noting that it plans to "strengthen execution to get ahead of competition" and "deliver a comprehensive range of products to offer customer choice."

Also faces legal action

In March 2010, Apple engaged HTC in a patent dispute with the US International Trade Commission, asserting more than 20 patents and asking for a injunction against HTC's infringing products.

HTC subsequently paid $300 million for a stake in S3 Graphics hoping to use the company's patent portfolio to defend itself from Apple, but the iPhone maker was not found to infringe upon those acquired patents. HTC then acquired two patents from HP that it is using to countersue Apple.



25 Comments

quadra 610 16 Years · 6685 comments

Quote:
 "strengthen execution to get ahead of competition" and "deliver a comprehensive range of products to offer customer choice."

 

Gobbledygook.

sflocal 16 Years · 6138 comments

Quote:
Originally Posted by Quadra 610 

 

Gobbledygook.

 

Exactly.  When I read that, I immediately thought of my favorite management BS-generator:

http://www.andrewdavidson.com/gibberish/

blastdoor 15 Years · 3594 comments

Bad news for Google. 

 

If Samsung is the only company left standing selling Android, Google's position will be greatly weakened. All we need now is for Samsung to fork Android and Google's failure will be complete. 

tallest skil 14 Years · 43086 comments

Originally Posted by Blastdoor 

All we need now is for Samsung to fork Android and Google's failure will be complete. 

 

Or Apple to fork Samsung in trial.

gwmac 17 Years · 1800 comments

Quote:
Originally Posted by AppleInsider 

Of the 52 million devices Samsung was estimated to have sold, only 10 million of those were its top of the line Galaxy S III.
All of the 26 million smartphones Apple sold were iPhones, and most of those were the newest iPhone 4S.

 

 

The S3 really hasn't been out for very long. It was released overseas a few months back but only was released in the U.S. a short time ago. Samsung reported that they have sold 50 million of the S and SII series in fact. However you want to slice it, they went from around 20 million in this quarter last year to 52 million this year. Apple used to be able to say that although Android together was larger than Apple's share but Apple sold more than any single Android manufacturer and can no longer say that. They must be doing something right to jump from 20M in Q2 2011 in one quarter to 52M in Q2 2012.

 

Having said that, I think the HTC One is a very nice phone if you like Android. The display is absolutely gorgeous. I am surprised that Samsung is destroying HTC in sales. It matches up well with the S3 and even bests it in some categories. 

 

I imagine there is a lot of pent up demand for the new iPhone for two main reasons. 1) LTE and 2) larger screen. There is very little reason to believe it won't deliver on both so sales will skyrocket and possibly get Apple a lot closer to Samsung's numbers. Lots of 3, 3GS, and 4 owners that skipped the 4S in order to buy the 5.