If You Thought HTC's Situation Couldn't Get Any Worse, Think Again


One month ago it was fairly clear that in spite of it being December, HTC’s 2018 was a non-starter. Early in the month the company confirmed its unaudited consolidated revenue for November which left the company with the massive task of generating serious income in December if it was going to end the year with an annual revenue of over $1 billion.

Unfortunately for HTC, that has not happened. The company has now released its unaudited consolidated revenue for the month of December 2018 (as well as the rolling figure for the year overall) and instead of rising to the task, the year actually got even worse for the company.

December down, year down, everything down

HTC this week confirmed that December’s revenue came in at NT$1.35 billion which in US speak translates to about $44 million. With the Holiday season in full effect December would be when it's expected some sort of month-over-month increase would take place, but that was not to be the case considering HTC brought in around $48 million in November. Making matters worse, the $44 million for December is not only less than what one might have anticipated for the month, but it also bucks the monthly trend that had started to see the company increasing revenue, slightly. In September the company brought in around $40 million and this rose to $42 million in October before rising to the $48 million noted for November. The $4 million decrease for December therefore saw the company’s only positive trend returning to a negative.

From HTC’s perspective, what is arguably the worst news still, is the annual figure. As while a company can have a bad month or two the year revenue highlights exactly what is happening and it’s really not good news. With the December figure included, HTC realized annual revenue for 2018 in the region of NT$23.74 billion. In other words, $770 million US. Well over $200 million shy of that now-elusive $1 billion goal.

Why does the $1 billion marker matter?

In truth, it doesn’t matter at all. It is simply an arbitrary number. However, in HTC’s case, it is the symbolism attached that actually matters. As this represents one of the lowest points for the company in recent memory. The last time the company was anywhere near the $1 billion annual revenue figure was back in 2009 and that year still saw revenue pass the $1 billion threshold. You would have to go back much further to actually start to hit numbers as low as the $770 million now confirmed for 2018. It really is that bad.

Even if you were only to draw comparisons between 2018 and 2017, the picture looks just as bleak. Previously, 2017 was the lowest year in recent memory for annual revenue, and yet 2017 was still a hugely better year for the company. For example, by the close of 2017 HTC had managed to bring in around $2 billion US. A year later and the figure is barely more than a third of the 2017 figure with the year-over-year decline now officially confirmed as 66-percent.

A bad situation that’s likely to still get worse

The situation is so bad that it’s difficult to even point out any positive. The monthly revenue is down from the month before, the year is down from the year before, and every year for the past seven years has been down from its year before. What’s worse is these have not been gradual yearly declines, but declines that have consistently been dramatic. Back in 2011 the company announced $15 billion US in revenue and ever since then the figure has declined by about $2 billion US each year. Technically, the decline in 2018 is below that $2 billion average although considering the company only brought in $2 billion in 2017, it would have required no revenue at all in 2018 for the company to maintain the same average.

Looking forward and there doesn't seem to be any obvious way out of the situation for HTC. The company has seemingly decreased its smartphone product output each year and so it has less opportunities to generate revenue than previous years, and those devices that have come through, including the 2018 U12 Plus smartphone have failed to elicit as much interest as they should have. The company's one saving grace is its virtual reality ambitions through its Vive division, although even that is facing some difficult times ahead. As with the initial launch buzz of VR now starting to subside, and a rise in competing (and more affordable options), Vive is likely to face greater challenges than it ever has before. Not to mention, VR is a long-term play in general and not something that’s expected to help a company like HTC immediately bounce back. At this point, it seems unlikely anything will be able to help HTC bounce back to the days of old. That HTC is now a distant memory.

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About the Author
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John Anon

Editor-in-Chief
John has been writing about and reviewing tech products since 2014 after making the transition from writing about and reviewing airlines. With a background in Psychology, John has a particular interest in the science and future of the industry. Besides adopting the Managing Editor role at AH John also covers much of the news surrounding audio and visual tech, including cord-cutting, the state of Pay-TV, and Android TV. Contact him at [email protected]
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