HTC profits plummet 79pc – what does the future hold for the smartphone maker?

8 Oct 2012

Taiwanese smartphone maker HTC has reported a 79pc drop in its third-quarter profits and a 48pc decline in revenues. The latest profit is the lowest for the company since 2006.

The company reported a profit of NT$3.9bn (US$133m) compared with NT$18.64bn last year on revenues of NT$70.2bn, which were down from NT$135.8bn last year.

It is hard to reconcile the HTC of 2012 with that of a company whose stand at Mobile World Congress in 2010 was swamped as phones with enigmatic titles like ‘Hero’ were a mission statement in themselves for the aspirations of a feisty company.

Indeed, at Mobile World Congress this year the company could barely contain its pride in terms of devices like the One X.

However, in the space of just two years, HTC has gone from being one of the world’s fastest-growing smartphone makers to being overtaken by Korean giant Samsung in terms of Android devices. While devices like the Galaxy S III and iPhone 5 are set to deliver hefty profits for Samsung and Apple respectively, it seems HTC has failed to generate the same kind of buzz around its products. Last week, the company unveiled its One X+ smartphone.

As we hurtle into the critical fourth quarter, HTC is competing in a market dominated by Samsung and Apple at the high end and a plethora of Android-device makers at the low end.

Even competing in the emerging Windows Phone market is no comfort for HTC, which previewed new Windows Phone 8 devices at a glitzy New York event in September.

According to Gartner, Windows Phone has only a 2.7pc sliver of the global smartphone market and this figure is unlikely to budge unless more apps are created for the Windows Phone ecosystem.

HTC needs to pull something magical out of its hat to generate the kind of buzz that gets rivals like Apple and Samsung noticed. And that won’t be easy.

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years