In perhaps yet another sign that the premium smartphone market may be maturing, struggling handset maker HTC has predicted its first-ever operating loss, and revealed it plans to concentrate more on mid-range phones.
In announcing the results of its second fiscal quarter on Tuesday, HTC revealed it expects to post the company's first operating loss in its history in the third quarter. HTC's operating margin was just 1.5 percent in the third quarter, but the company has forecast a range of zero to negative 8 percent operating margins in the third quarter.
The Taiwanese smartphone maker revealed it plans to launch a range of "innovative and competitive mid-tier products in the coming months." HTC executives acknowledged that it has not been competitive in the mid-range smartphone market, where the industry is currently seeing the most growth.
HTC's announcements come as Apple is rumored to be planning to release its own new mid-range smartphone. It's expected that the company will release a new, less expensive iPhone model with a plastic back in the coming months, alongside a new high-end model.
HTC's changes mark a contrast from last year, when Chief Executive Peter Chou touted his company's insistence on using high-quality materials to build premium smartphones. That strategy eroded HTC's margins, and has now prompted the company to attempt to lower its build costs and sell mid-range smartphones with higher margins.
HTC was once one of the largest smartphone makers in the world, but has seen its share of the market slide as the industry has increasingly become a two-horse race between Apple and Samsung. Recent data from comScore found that HTC held the third-largest share of U.S. smartphone subscribers with 8.7 percent, well behind Apple's 39.2 percent and Samsung's 23 percent.
47 Comments
I wonder why out of the Android makers, only Samsung seems to be doing well?
A good start for HTC would be to dump Windows phones.
The only good thing about the HTC one are the front facing speakers on the phone (they are awesome by the way). The fact that the HTC one is impossible to repair and only have a 4 mega pixel camera is the reason why it cannot compete with Apple and Samsung.
I wonder why out of the Android makers, only Samsung seems to be doing well?
Some of it is due to advertising. Samsung invested heavily in it last year, and it paid off in spades.
I can easily recall the Samsung TV ads. If there were any HTC ads, I don't remember them.
-
Some of it is because of relatively little missteps that add up over time.
For instance, I used to love HTC smartphones. Little by little, that love eroded, due to broken USB ports, strange power button locations, etc. It was gradual, but pushed me away.
I would've come back right away for the HTC One, but it got delayed coming to Verizon. Another goof.
[quote name="BuddyRevell" url="/t/158780/htc-warns-of-its-first-ever-operating-loss-will-reduce-focus-on-high-end-smartphones#post_2370628"]I wonder why out of the Android makers, only Samsung seems to be doing well?[/quote] Lying, cheating, stealing, paying off governments and telecoms, and generally following the Google way of thinking.