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HTC to book loss of $40 million US with OnLive

HTC Loss Image

Financial news for HTC continues to get worse with the company now chalking up another $40m (US) loss. From underperforming on smartphone sales to “restructuring” its investment in Beats audio, HTC is not having a good time of it. The hit this time comes from the cloud gaming service OnLive.

HTC’s hope, was that cloud gaming could help bring high end games to those without the beefy hardware to pull it off. Other big players such as AT&T, Autodesk and Warner Bros also had a stake. OnLive almost went bankrupt due to the huge investment it needed to make on infrastructure to power their gaming service.

OnLive, in the absence of any real revenue stream (customers) and a failure to secure more capital, has been forced to sell to a new owner. None of this is good news for HTC, at one time they were the darling of the smartphone industry, on the back of that HTC spend over $700 million on acquisitions. Along with their more recent loss in Beats audio, questions are now being raised as to their investment strategy. In particular, how many of these investments lack “synergy” with their core business in Smartphones.

HTC is obviously keen on absorbing technologies and companies that will help the company compete more effectively with companies like Samsung. They have invested $300 million into the graphics company S3, some say to help protect them from patents issues. It looks to us like HTC has made some serious mis-steps with their investments.

Instead of giving them an edge competing with manufacturing giants like Samsung they have further weakened their financial portfolio. HTC is up against stiff competition with Android handsets as well as the Windows Phone units. Unlike Samsung for instance HTC doesn't produce all the components for their phones, that’s a serious disadvantage.

A weaker fiscal position could severely affect HTCs ability to develop world-class smartphones. Here at WPCentral we certainly hope they can pull themselves out of this and get some cracking Windows Phone 8 devices out there.

Source: FocusTaiwan

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Reader comments

HTC to book loss of $40 million US with OnLive

34 Comments

I dislike annoying corrections much less than I dislike seeing the word "loose" in place of "lose."

Also, the first paragraph should read, "HTC is not having a good time of it." HTC is a single entity, therefore the verb should be singular as well. I'm happy to see that I'm not the only one frustrated by the dumbing down of the English language that is caused by the internet.

There shouldn't really be a comma between the second and third words on the second paragraph either.
But then America is the only country where a 30 year old building made from ply and timber qualifies as important ancient architecture.

Would've been nice to see HTC seriously publish apps like Nokia has done. Windows Phone Xbox LIVE could use some exclusives. We used to have Xbox Companion and Halo but Microsoft Studios doesn't seem to have faith like they did with the 360.

Strong HTC fan here and feel real bad about this....have a tear in my eye now :(
I think their mistake was from last year when they produced tons of same looking handsets to the market...that was a big mistake.

Agreed. I thought so too back then. They released so many phones it just got confusing. They kind of deserve the spot they are in now becaue of their recent strategies. I'm not surprised it goes bad for them anyway.

I had high hopes for OnLive, although at the same time I always imagined it would be acquired by one of the big three gaming companies. Either as support for their future consoles, or some protection to patents (or both)

Isn't Onlive behind the Samsung Cloud Gaming on their Smart TVs? Even though Samsung Cloud Gaming is still in Beta, I am one of their beta testers and am loving it. Its XBOX level games without a console.

I've been an HTC customer since my first smartphone in 2007, but I don't really know why I'm so loyal... every phone I've had has disappointed me in terms of either bad hardware quality/quirks or bad/lack of software updates. HTC does a really bad job of supporting their products, and it's too bad, because I feel like they could do great things if they stopped releasing a billion phone variations every year and focused on a few award-winning designs, decent specs for them, and improved their software updates.

They did have a name that resonated. The "evo" line. Many became familiar with that and became accustomed too, like the "Galaxies" from Samsung. Out of the blue they decide to have "one" series instead. Stupid!!! Name plus improved products! No they changed it all.

Evo is and always has been a Sprint only thing. Hence Sprints variation of the One series is the HTC Evo 4g LTE, and has a kick stand.

Don't forget the HD series. HD2 raised the bar for everything. After HD2 they have been weak in design, but I really like my Titan I must say.

Wow. People really can be unfriendly here if they want to be. Is it possible autocorrect was culprit? Go get work as an editor if it is that necessary and fulfulling to nitpick over a single word of a forum reply.

Got to wonder how this is in comparison to the loses that Nokia has been reporting recently (bit to lazy to dig through and find out).  I'm sure that numerically Nokia's losses were more, but as a business (certainly in mobile) Nokia have been around longer, so I would think more stable especially with having the majority global markeet share until recently. - So, I wonder if this actually puts HTC in a worse position than Nokia?

Looking at the picture it makes one thing HTC took a $400 million loss because of Windows Phone phones alone :/

I got into a beta program using onlive for the PC....It worked but, grapics and sound sucked...
 
With the money I spend to build a kick A$$ gaming PC (well, it's about 2 years old but, it holds up with the best of them still), it might save a few $$ to use onlive but, the grapics and sound is a turn off for me, I would rather spend the money to get the full game.