The HTC One is critical this year for HTC’s survival as a company, before the company starts losing money. It’s not there yet, but it has reached record-low profits in the past quarter because the HTC One was delayed due to supply issues.
HTC has made only $85 in profit in the last quarter for $1.4 billion revenue, which is down from the $470 million they made a year ago on a $2.2 billion revenue, Bloomberg are reporting.
“HTC One’s production shortage means lost sales in the first quarter will be lost forever, not just delayed,” Lu Chia- lin, a Taipei-based analyst at Daiwa Securities who rates the stock hold, said before the earnings announcement. “HTC One has a good design, and they still have lead time ahead of the S4, so revenue has a good chance to rebound this quarter.”
The worst part about the supply delays is that HTC also couldn’t do proper advertising for the HTC One when it tried to launch it globally. Sure, they will do some marketing when the phone lands in US and other markets, but at that point many will feel like it’s an “old” phone, and they might not care as much about it.
Plus, even then they might not be able to advertise it too much, because they might still not be able to ship that many units in the first few months. This puts the HTC One in an even weaker position compared to Galaxy S4 and other flagship devices being launched in the second part of the year in US.
HTC also seems to be distracted with other projects such as the so called “Facebook phone” which is the 3rd time they’ve tried after two initial failures in the market, and also with Windows Phones that don’t sell well for them anyway. With such tight and increasingly smaller budget, the last thing they want to do is be distracted right now, and waste money on other projects. In fact, this is exactly what they did last year when they wasted money on OnLive, Beats Audio and S3 Graphics. If HTC really wants to recover, they will need a more focused approached.