HTC-ONE-M8-AH--7

HTC Bleeding Money in Third Quarter so Far

August 4, 2014 - Written By Cory McNutt

HTC, the ‘Quietly Brilliant’ company is the classic look at a company that most people love and are rooting for, they design and build some of the most beautiful devices, and yet continue to lose money.  Some may argue, and rightfully so, that they do not have the marketing budget of a Samsung, but their woefully slow sales and profitability has to be more than simply advertising.  Their HTC One M7 in 2013 got off to a shaky start due to poor parts distribution channels, but was still a big hit, as was their follow up this year with the HTC One M8.  During the HTC One M8’s release in the Q2 they actually showed a decent $2.2 billion in revenues with $76.5 million in operating profit.

In July 2014, HTC is showing a sharp decline from the previous month, as well as during the same period last year.  HTC brought in $354 million, down from $730 million in June and $524 million in July 2013.  Certainly, a lot of this drop off has to be because of the HTC One M8, released in late March, was at its selling peak in April.  However, HTC needs more than a one-hit wonder each year if they are to compete with the likes of Samsung and LG that bring out multiple headsets each year, including lower budget models to sell in other markets.

HTC is estimating revenue of $1.4 billion to $1.57 billion, so HTC will have to make up a lot of ground in August and September – but how will they do that? HTC jettisoned two high-level ranking officials – CMO Benjamin Ho and head of operations, Fred Lui…after all, someone has to go besides CEO Peter Chou.  HTC does have a new HTC One W8 coming out that should be announced at an event set for August 19.  It is essentially the beautiful HTC One M8, only it will be running Windows Phone 8.1 rather than Android.  HTC continues to push its mid-range and entry-level devices like the Desire 816 and 610.  There are also multiple leaks of an upcoming HTC Nexus 8 Tablet available later this year, running the new Android L operating system.

With the sale of Windows Phones where they are at, I hope HTC is not banking of their new HTC One W8 bailing them out, but it is good to see they trying to expand their market line.  The Nexus 8 tablet, which has Google’s advertising dollars attached to it, should certainly give HTC a lift, however, neither one of these devices will help much with third quarter sales and profit figures.  If there is any solace for them at all it is the comfort they can find in declining Samsung figures.

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