HTC Loses Money in Q1, Anticipates Profit in Q2
Smartphone and tablet maker HTC had a rough start to 2014. A press release by the company revealed that the Taiwanese technology firm lost NT$1.88 billion ($62.06 million) in the first-quarter of 2014. The Q1 announcement came Monday. It was posted in both English and Chinese.
The results were and unaudited consolidated report. The loss shows that HTC did not meet expectations for the first three months of 2014, although the company was not predicted to have a poor quarter. Despite the losses, the company is optimistic that HTC will do better in the second-quarter.
“The company expects to see positive trajectory of its revenue in April from March and forecasts quarter-on-quarter revenue growth in the second quarter,” it said in a statement.
HTC held 10 percent of the world smartphone market share two years ago. Since then, it has slipped to 2 percent in a smartphone market that has become even more saturated and competitive in that time. Currently, the top three smartphone makers are Samsung, Apple (NASDAQ:AAPL), and LG, controlling a combined 50 percent of the worldwide smartphone market.
Bloomberg reported last October that the decline of its market share in the smartphone market is similar to BlackBerry (NASDAQ:BBRY), a Canadian smartphone maker that once dominated the smartphone market, as well as Nokia, a Finnish company that sold its handset business to Microsoft (NASDAQ:MSFT). Yet, HTC is not ready to call it quits any time soon. The company is looking to start growing again by launching new products.
HTC has reason to hope. Its newest smartphone launched in late March, so its sales will likely impact second-quarter revenue. TechCrunch reported in February the company will also focus on lower-priced devices to help drive sales in a market dominated by the iPhone and fellow Android smartphones.
Mark Stocker, a Taiwan-based brand consultant, told BBC News that HTC needs to be more like Apple to succeed in the smartphone market. ”Mimic them, but figure out what your brand stands for,” he said. ”If Apple is Mercedes Benz, try to make yourself BMW.”
Stocker’s advice is based on the fact that the top-performing smartphones are the high-end models, such as the iPhone and the Samsung Galaxy, are currently making its companies the most money. Yet, even if the company continues its planned low-price and mid-tier phones strategy instead of trying for more high-end products, HTC may increase profits. Sales didn’t drop for the first time in more than two years. HTC said in a statement released by the company that it anticipates positive revenue in future quarters.
“The company expects to see positive trajectory of its revenue in April from March and forecasts quarter-on-quarter revenue growth in the second-quarter, driven by strong market demand for its new products, including flagship HTC One (M8) and mid-tier flagship Desire 816. The company expects to return to profitability in the second-quarter, as indicated on the earnings call on Feb 10, 2014.”
HTC was founded in 1997.