HTC Expects Improved Revenue for Q4 2014

October 31, 2014 - Written By David Steele

HTC is arguably the manufacturer that have enabled Android: they manufactured the first early Android devices, taking something of a risk away from their established Windows Mobile devices. Their transition from the HTC Diamond (does anybody remember this?) and Palm Treo Pro to the HTC Dream, Hero is almost legendary (as it happens, the Legend came later…). However, after their successful 2010 Desire flagship, things began to come a little unstuck. The 2010 Desire HD was crippled with a tiny battery. Their 2011 flagship model, the Sensation, was a fine device but by then, Samsung’s marketing machine was roaring the S II device away. Releasing an improved Sensation SE did little to improve things. In 2012, they promised to refocus their portfolio with the One brand, which resulted in the confused selection of One V, One S, One X, one of which is nowhere near a flagship device, one could be and one was. In 2013, however, HTC dropped the HTC One M7 on us. Personally, I was bowled over with. Yes, it was beaten by Samsung’s on-the-box specification, but when it came to holding and using the One, for me it was streaks ahead. Not perfect, of course and nor is the 2014 HTC One M8.

Unfortunately, Samsung’s marketing budget means that the recent HTC devices haven’t had the success they’ve deserved. What do I mean by this? Samsung signs are almost everywhere! One of my local superstores appear to have devoted their entire electronics section to Samsung gadgets. And although we have seen signs that Samsung’s approach is coming a little unstuck, they still have considerable mindshare. How many people equate their Samsung Galaxy experience to Android? This is changing, but I am getting a little off topic here: HTC are almost exclusively a smartphone seller, but they’re getting back into the tablet game with the launch of the HTC-made Google Nexus 9 tablet. They don’t have other products to peddle.

We’ve also seen HTC’s business numbers continue to struggle. There are ongoing rumors that HTC will be snapped up by a bigger business but so far, this hasn’t happened. And today HTC have announced that they expect fourth quarter revenue to exceed market expectations. Currently, the market expectation is for revenues of T$41.5 billion and HTC reckon it’ll be between T$43 billion to T$47 billion ($1.4 billion to $1.6 billion). In the third quarter, the company produced revenues of T$41.86 billion. Of course, revenue is only one part of the story; margin, profit and cashflow is important. In the third quarter, gross margin was just under 23% and HTC are expecting this to drop to between 19% to 21%. This has the hallmark of increasing sales through reducing margins (typically prices), although there are other factors at work including currency movements.

It seems that HTC, like BlackBerry, are stubbornly refusing to roll over and die. Regardless of if you like their products, this is a good thing. The Android world needs competitors – both within and without. Maybe it’s time to buy a HTC device?