HTC releases Q2 2012 financial report, paints bleak picture


HTC has released its audited Q2 2012 earnings report today, which keep in line with unaudited results we touched on last month. According to the report, HTC generated revenues of NT$91.04 billion (~$3.04 billion), while net income sat at NT$7.4 billion (~$247 million) between March and June this year. The company's gross margin was 27.01% with an operating margin of 9%. 

HTC expects a tough Q3 and we will be looking out for further decreases in revenue, profit and operating margins in the next financial report. Revenues are expected to be in the region of NT$70-80 billion, with a gross margin and operating margin of 25% and 7% respectively. Should the handset maker continue to dwindle slowly south in the third quarter of this year, it'll paint a rather bleak picture compared to the height of success back in Q3 2011, with reported revenues of NT$135.82 billion (~$4.53 billion).

Perhaps if HTC focused more resources on building Windows Phones -- and promoting the devices once launched -- they could see a slightly stronger turnover on the platform. With Windows Phone 8 and Windows 8 just around the corner, both (along with the Xbox 360) with integrate further with Microsoft's mobile platform, it could prove to be a strong opportunity for the company to prepare for its release. Android is a proven battleground with OEMs struggling to build ground with the likes of Samsung. We're sure everyone would welcome further support from HTC here at Windows Phone Central.

What do you guys think about the situation HTC is beginning to find themselves in? Do you believe Android is still the sole focused future of the company? Let us know your thoughts in the comments.

via: Android Central


Reader comments

HTC releases Q2 2012 financial report, paints bleak picture


I fully support the notion for more HTC Windows Phone's. I love my HD7 but it's time to start thinking about a new WP8 device. Just hoping the Zenith is as nice!

Surely the market for Android is only so big; perhaps because the market for Android can't support so many OEMs, it will force companies to expand to other platforms--and I'm pretty sure Windows Phone is the only real alternative option.

If HTC would show a little support and promote windows phones they'd be the #1 OEM. Their hardware is superior. They just don't have Microsoft's cash to promote or get exclusive apps like Nokia.

MS will never support HTC the way it has Nokia because HTC refuses to support WP the way Nokia has. In fact HTC announced last year that after Titan II, there'll be no more WP for them until WP8 rolls out. Nokia on the other hand made WP a priority, plus much more value-added assets like Nokia Maps, Nokia Drive, etc. which they made available to the WP8 platform to help put it on equal footing with Android and iOS!

In all fairness, it makes complete sense to not release anymore wp7 phones and wait till wp8 because it's so close and they are able to concentrate on wp8 for a good release. After the titan 2 and Lumia 900, all we've seen is the focus 2 (maybe the Lumia 610, can't remember release date but that was more to cover the tango market). I don't think HTC is doing nearly as much as Nokia, but id definitely put them in second. The phones are somewhat creative and different. Keep in mind HTC was pretty invested in android when wp7 came out, you can't just stop full production of a market leading product in favor of something new and uncertain (no Symbian is not in the same category). Because Nokia was able to fully dedicate to wp7, they got MS's cash and were able to do what they did. If a company like HTC does more than a company like Samsung, without monetary support from Microsoft in order to go head to head with a company that does, I'd say that deserves respect. Sorry about the run ons, I'm extremely tired.

Please remember that HTC was the premiere partner for WP7 launch with four new phones and a fitfh one, the HTC 7 Pro, coming shortly after. It was HTC who invested in a struggling new eco-system with no Apps, whilst they were perfectly happy sellling their Desire series and other android phones (which were top of the line back in 2010). Nokia had to invest in WP to survive, but HTC didn't have to, they were fine without it. And they still realeased the Titan and Radar when other OEMs backed out. It's actually a shame that they got destroyed on the droid market by copycat Samsung with their anti-apple cult followers and android fanboys virally promoting the Galaxy.

HTC hardware isn't superior. Their quality is sometimes lacking. If they want to compete they either need to focus on low end or improve hardware quality.

To me I like my HD7 but if I play something from the tube or want to kick on some tunes If I don't have a set of cans on one could not hear it. to me HTC devices all look the same the exception being the Titian. I'm on T-MO and my 710 blows away the HD7.it's just too small for me.screen size. Plus when I had a problem with the HD7 and used HTC tech support I would have had a better chance calling the White House and asking for the pres. But when I talked to Nokia tech not only did I have an answer and a solution but I gor three call back from them asking if everything was still runing right and if I had any more issues. That sold me right there and then on Nokia.

Just curious how the 710 blew the HD7 away and what kinda problems did you have with your HD7 to have to call tech support? I went thru my phone and emailed HTC about not all weather conditions making sounds in the HTC hub and HTC called me once a week for 3 weeks until I talked to them. What did you have to call Nokia about on your 710? I'm on Tmobile too. I have a HD7, Dell Venue Pro, Radar, Titan 2 and and Nokia 900. I can only use the 900 on WiFi. My HD7 loads everything just as fast or faster. HD7 speaker is better than the 900. I haven't tried the 710 but please explain how it blows the HD7 away. The majority of tmobile users consider this a major downgrade.

I call BS! I have a HD7 too and no it doesn't load anything near as fast as my Lumia 900 or 710 and it shouldn't beacuse they both have a 1.4GHz processor vs a 1GHz processor on the HD7. And my HD7 speaker sucks on speakerphone. Yes with a headphone it's better, but that's the only thing better on the HD7. I love the HD7, don't get me wrong, but to claim it loads things as fast or even faster than the Lumia 900 tells me you don't own the 900.

As stated I can only use my 900 on WiFi. It can't be unlocked for tmobile at this time. That is exactly why I have it listed on Craigslist in Savannah GA for $250. I easily bought a code off eBay for my Titan 2 but mms want work on tmobile. The 900 speaker sucks too. It's located on the bottom. The sound gets muffled on speaker, music or games when you hold it. I've never had a 710 since the Radar had a ff camera and a lot better camera. In my location (Savannah GA) my HD7 loads just as fast as my 4G Radar. If you want the 900 I'll let it go for $200. It still has the plastic on it and new but I don't have the box.

What does only using your 900 on the WiFi have to do with the relative speeds of both phones? Does loading games have anything to do with connectivity? Or do you need Wifi or 3G/4G to load an app? And no my Lumia 900's speaker does not suck, in fact it's excellent. I don't know how you hold your phone, but I hold mine on the sides not top to bottom. So i don't see how that affects the speaker. Infact I think that's a brilliant place to put the speaker compared to the HD7 that has it tucked away in the back and you can't hear squat. And I have 2 Lumia 900's so I don't need another one.

I was comparing WiFi for websites. Apps load about the same for me. A lot of phones increase processing speed because android has off the charts processing numbers. You don't need all that speed for loading apps. It's overkill. Since Nokia had the bright idea to put all the buttons on the right side of the phone I usually have to keep 2 fingers on the bottom. This is how I have to or I'll accidentally hit the camera or lock button. By chance have you played with a Titan 2? I've read on here (I think it was Paul) where they prefer the more natural look of the screen on the titan over the 900 and the camera has a way better processor. You should choose the phone that's right for you. For me the only weakness of my HD7 is the screen brightness. Still on tmobile to have a phone the fully works I use my HD7. To me it's just as fast as anything out there and the screen size.

The 710 is faster the volume is much better and apps load and run much faster. The screen resolution is much buch better, HD7 problem is would turn on and off at will. if I used it on the charge there was no way it would go into sleep mode, I had to remove the battery.The 710 would black-out on me...Now back to the HD7 volume being equal to the 900? huh i've used the 900 and could listen to tunes of see a tube without having to use earphones.....I bought the 710 for two of my kids and then replaced my wife HD7 with a 710. As i said in other post if the 710 had a larger scrren It would be on my desk right now charging as I write this.That is the only area THAT THE hd7 HAS IT OVER THE 710. the DAY T-MO gets a good high-end Nokia device I'll be the first to be in line for it.

Liar! Dell venue pro has done great phone speaker I've used. HD7 sounds like crap and doesn't go loud.

I used to be a big HTC fan, but all there phones started looking the same and there quality sucks. Nokia all the way!!!!

No surprise there either. Did see any support from them in a long time, in fact it seems like instead of adding new premium apps I see less apps available out there. Someone count how many apps does HTC corporation hold v. Nokia.
Ugh... Someone make HTC bring sound enhancer back!

Sound enhancer never left. It's backed in now and no longer a separate app. Go to settings it's close to the bottom.

Its not there. Its an app you download. When you download it, the app it self disappears from the list and then appears in settings. I had to reset my phone to manufacturer settings so I lost it.

It's in your settings because a while back you installed the app! It converted to settings. Reset your phone to factory defaults and tell me if it's there.

No android does not ever equal long term success. Until wp8 grabs huge market share. I suspect most OEM to release phones with wp and android. Supporting two OS is a must for OEMs and no android is not the future of HTC. Not even close. It may be for Samsung but they have to go on a big road to get there now that google has punched them in the gut out because they bought Motorola. And they loose their android exclusive from the nexus devices and they are In a fight. And google is not even helping them. To defend

Nokia's massive losses are bleak.  HTC making a quarter billion dollar profit in the middle of a serious downturn in most of the world is not that bleak.  This is anal-lysts trying to stampede another company.

HTC has always supported Windows Phone. They were first to China, first LTE in the US (slightly ahead of the Lumia 900) and have at least one phone on every major US carrier. They have done a great job making phones, but maybe they just need to do a little bit better advertising?

HTC should be paying attention to the message MS is sending with the Surface: Build good hardware, or else!  MS knows they can't afford to fail in the mobile space, and if their OEMs continue to treat WP as the ugly stepchild, I have no doubt MS will step in and do it right.

I like the titan but no firmware fixes:-( they have to support their phones! Btw this is my second titan. The first died.

I disagree. Look at Apple... they are one OEM, one company, and they are hugely successful. Android has Samsung and HTC... and then all the rest. I'm not saying OEM's aren't important, but these platforms are largely successful because of one or two of them. Unfortunately Android was supposed to be cheap and easy to build for, and it hasn't proven to be that way at all... it violates everyone's patents to the point that all but Motorola have signed agreements with Microsoft just to protect them from lawsuits. They'd be better off paying for WP and helping build a solid platform. Honestly, businesses are discovering the inherent downside of open source. Anyway, Microsoft would be better off having Nokia and HTC with a few "universal" device models that gives them the diversity and uniqueness, and then promote the hell out of them.

OK, so now let's take a look at the PC market and see how the "hardware and software from one company" strategy works against Windows and it's myriad of OEMs. I hope you get my point.

That's well and good, unfortunately HTC itself made the announcement last year that after the Titan II that there'll be no more WP for them until WP8 rolls out. HTC said they'll focus on Android for 2012. Only time will tell if they made the right decision.

Maybe if these morons were to advertise the Titan 2 w/16mp camera, maybe it would have been a different story? Seriously, HTC One S for T-Mobile as their camera flagship? You guys remember that commercial where the guy is skydiving? Where was the Titan 2 commercial at? Fuck them. Nokia or Samsung only!

Quit being so closed-minded. WP needs all the OEMs it can get so we can get more into the hands of commercials, HTC already said they would step it up for WP8 while Samsung initially said they were going to quit all together but eventually backed down. HTC also has a sound enhancer which makes the sound better than the lumia.

They didn't really say they backed down wp8. Samsung supports wp. They know it's gonna be the third most used OS

Why are you trying to be unnecessarily defensive for HTC? They have sound enhancer and so what? The truth needs to be told for them to do the right thing. If they have done just an atom of what Nokia did for Lumia brand the Titan 1 &2 would have made a huge impact but they decided to put all their eggs in the freaking maleware infested basket.

I'm not sure about the Lumia 900, but the speaker and/or sound quality in Lumia 800 is horseshit.  It makes me miss my old HTC Mozart.

You obviously missed HTC's announcement last year that after TitanII there'll be no more WP for them until WP8 because they'll focus on Android in 2012! That Samsung thing was just rumor which they've proven wrong because at least they continued to put out minor (ugly-looking too!) models. As I said, time will tell if HTC made the right decision.

Maybe HTC knew current hardware was dead. Maybe they can't justify spending tons of cash on a new OS ( no matter how great it is ). You gotta remember Nokia was a sinking ship. The only reason the can promote is because Microsoft is flooding them with cash. You can't fault other OEM's. Their not getting money from Microsoft. Their using simple economics. The more we sell the more we advertise. At 4% market share that's not a lot.

Yep, you speculate to accumulate; I'd hazard a guess that HTC would get more value from each dollar spent on promoting Windows Phone handsets and going up against a hasbeen such as Nokia (im typing this on a 710 and I love Nokia, but right now Samsung and Apple are the two companies trending), than attempting to take on the behemoth that is Samsung in its own monopolised industry sector (android).

More reason that Nokia was smart not to enter that lions den. At least with WP they can make that huge initial impact and make distinct devices. Samsung just has the Android market by the throat. HTC will hopefully pull through.

I've been an HTC guy since my first cellphone/smartphone (the HTC Mogul), but I think I'm done with them. Some of their devices-- Mogul, Touch Pro 2, EVO, Titan-- were well built but poorly supported. Whether it's defective parts or bad software support, HTC doesn't do a good job in supporting their customers. I'm still waiting on HTC and AT&T to release an update for the Titan to fix the myriad of hardware glitches it has, and no WP updates to Tango (officially, at least). Also to their detriment, they have a constant barrage of poorly implemented and barely different models that destroys their cost effectiveness as a business. I believe that if they switched to WP8 exclusively and then focused on a few, well-built powerhouse models that are mutli-national and well-supported on the software side... they could join Nokia on the low-to-mid-end to promote WP8 and truly differentiate themselves against Samsung and Motorola (Android) and Apple (iOS). Playing into Nokia's strategy of only have a few models and supporting their devices would go a long way into reducing their costs, increasing their profits, and satisfying their customers.

I'll also say that after being an HTC guy for so long, I'm probably going to switch to Nokia for WP8, as long as they have a 900-class (meaning not low-end) WP8 device at launch. Even if Samsung has a solid WP8 launch device, I always hate the cheap, plastic feel of their devices.


I disable the Sound Enhancer crap anyway... I've yet to experience it enhancing anything, and it's been proven to cause performance issues on the Titan anyway.

In fact, I'll point out that my Titan's headphone jack SUCKS and frequently cuts out because of bad connection regardless of the audio cable or headphones I use with it. It's definitely the weakest feature.

Then you got a bad titan or audio equipment because I get virtual surround sound and all my files sound the same whether they are 64k wma pro or 320k mp3.

64k and 320k cannot sound the same if you apply the same enhancements to each. It's not possible. There's too much lost in compressing to 64kbps

I must have gotten a bad Titan, touch HD, Diamond and Cruise then:) The sound has never been good I'm afraid. Call quality is awful, while the 900 is crystal

Apparently, you are not aware of Nokia's partnership with Dolby. 
In addition, Nokia's Rich Recording Technology is sure to make it's way to Windows Phone.  If you haven't heard of Rich Recording, there are plenty of YouTube videos to give you a taste.

I might as well have written this:) I feel sad for Htc, but maybe they'll step it up on wp8... However, pureview is the most exciting technology I have seen for mobile phones:) I've always loved Nokia hw, but hated their os. Now I love their os:)

I've had 3 HTC phones in the past and as much as I love HTC I'm done with them for my next phone. Their lack of support for windows phone has disgusts me. They forget who made them. Anyone buying anything but a Nokia is a fool. Nokia is the only OEM showing support for windows phone so Nokia will have my money next time around. Goodbye HTC. But the only way that's happen is if the carriers have Nokia to begin with. NOKIA, I want a big screen phone on T-mobile, Wind or mobilicity or a pentaband phone somewhere. If not I'm going to Android.

Here's an idea... stop following the leader and think for yourself for a bit. Perhaps then you can see things more clearly and stop being so insulting.

Their lack of support for Windows Phone has disgusts him like it did to me and after having 3 HTC Windows Mobile 6.x I said enough is enough and I went with Nokia Lumia 900 Windows Phone 7.5.
So what he is saying may sound insulting to you but it is a truth not a koolaid.
Believe it or not they lost so many loyal Windows Mobile customers becuase of lack of support for Windows Phone 7.x.
Simple as that!
Hope HTC do a right thing and will come back with full support for Windows Phone 8 and stay away from Android for their own sake.

No, it wasn't. I hated my last Nokia, N80, with a vengeance. HTC is half-ass on WP.... Thanx to profit thinking rather than pioneering WP like they did on WM:)

I'm at 4.3 right now with the HD7. I want the same or bigger on Nokia. I just hate how every carrier has a different phone. Up here in Canada you can get the 800 only on Telus and the 900 only on Rogers. What a stupid way of distributing your phones. I can get a Galaxy Nexus or Galaxy S3 on any carrier up here. Why can't windows phones be the same?

Well, I agree that there should be wider availability, you forget that relationships between Nokia and carriers have been estranged and are looking to gracefully get back in bed with them...concessions are a necessary evil in business. =[

Too many people manufacturing Android devices, time to break new ground and put the same or more effort into WP as they do Android.

I've had a good experience with my HTC Trophy. When my upgrade is available I plan on going with a Nokia Lumia, but HTC would be my 2nd choice. I love th look of the HTC one x and most of their designs as well. 
They need to forget about android and go WP 100%.

I like HTC and will always root for them to succeed, the titan 2 is a very sweet device, but no marketing, just like my Focus S, and guess what..phones don't sell. Its as simple as that.

I think the best Idea is for them to commit on their upcoming WP8 devices. The truth is they actually have good phones (andoid/WP). But they lack commitment. I see Samsung going all out on their advertisements, promoting their devices while HTC sits behind and watch wether their phones would sell or not.

Once the WP8 line up comes up, they should go full support on it like what NOKIA has done, with that attitude they'd surely come back on the podium for Smartphone makers.

Its a shame HTC isn't experiencing the success that Samsung is. Samsung phones are trash and have the worst antennas ever. The S3 can't place a call in some areas where my Trophy and Rezound have a couple bars. Every Samsung is like this. I work at a Verizon corporate store in northern Michigan and we avoid Samsung like the plague.

And the plastic feel. Even the S3 feels weak and fragile. I wonder what all the fuss is about. The HTC One XL is well built, but of course HTC will not tell anyone that.

I have gone through many HTC WM phones that I liked (thanks to ROM chefs). I hope they can turn things around.

I told this 2 years ago and again last year that going Android for HTC will not pay off and at some point it fires back
HTC was HTC because of thier famous cool Windows Mobile 6 devices. Then they went more to Android and this is a result.
No company ever had success dealing and working with Google. They should know better and they had to stay in Windows camp and be strong competeing Samsung junk phones.
Still they have time if they do a right thing and support Windows Phone 8 more than laggy Android or they do what Nokia did.
Now people undrestand that Nokia was smart way much smarter than HTC.

I agree with you man!. HTC was dumb to put their focus on Android. If doesn't HTC doesn't put their focus on Wp8 then they are the dumbest OEM. also Nokia was very smart to come to wp. their shares are increasing 

Nokia is losing money on WP, HTC is making money on Android, just less than last year. And NO company has made money with Google? I think Samsung is doing quite well. Until Microsoft can show that their don't-call-me-Metro interface can sell above 5%, HTC should stay firmly in the Android camp.

I don't have control over anything but what I find valuable. Nokia's support- updates & apps is what I thought I was getting with HTC. They made their move with Android, and are reaping the benefits. Good luck to them this fall, but I do not see myself supporting for them with my hard earned cash.

Its a little silly to just claim that their problems would go away if they bet heavily on Windows Phone - it won't. I'd love to see some killer Windows hardware (and they only recycle their Android models for WP) but the truth is that their focus will still be Android since it's their biggest cash cow. If WP does go off, they stand to benefit from it but at this moment, they just aren't being aggressive enough with what they make. They've done good by producing the One series but it'll only get tougher for them since Samsung's Galaxy line is set to become the next iPhone (I.e. every fool will have it and they'll act like its the pinnacle of mobile phone achievement).

Agreed that HTC should stay with Android. If WP8 can sell, there'll be plenty of time for HTC to put out WP8 phones.

Like I said before screw HTC. No one should buy HTC for windows phone 8 and teach them a lesson. Besides Nokia is better. On Nokia you get app first while everyone else has to wait, you get free GPS with Nokia Maps meanwhile HTC is charging for locations. HTC doesn't advertise they don't support or seem to care so screw them because they forgot their Windows Mobile history.

HTC is making money, Nokia is losing money. Just who is being taught a lesson? We WP fans are too small a number to teach anyone anything for now.

Remember that HTC just tends to put components together ... They don't actually invent or create anything from scratch like Samsung.

My HTC Titan is the worst phone I've ever had...

Man if HTC decided to quit Android one day and go 110% with Windows phone, it would be so crazy for WP8 visibility! But I don't think this will happen anytime soon.

As someone said:

Samsung is following HTC, HTC is following RIM, RIM is following Palm. That's the pattern. Not conviced? Seriously, How can Samsung sell anything when Nokia WP8 come out! Someone give me a reason to buy Samsung then.

HTC's fall is no surprise to me. I said this many times, In mobile world, the stupdiest is Motorola. Dead already. Then it comes HTC and Samsung. Those people count android as their future, watch what will happen to them.

I say it for the 11th time, android is dead. You will see android tablet has 0 market share this winter. When Nokia WP8 bring the same specs to the android garbages, better build quality, much better design, PureView, no one will buy the android garbage.

The best HTC phone I ever had and still like is the G1. That said the support was crap. My first windows phone was a Titan. Its great as a media player, and taking pictures. It is horrible as a phone. Call quality sucks, sending text messages or using the keyboard to type on a message board and having it disapear sucks, the reception sucks, the wifi sucks, the bluetooth sucks, the battery sucks, the support sucks, the apps they developed with the exception of the photo apps suck, the sound enhancer that the follwer is so hyped about sucks and proves he has basic if not less understanding of sound algorithems and encoding for audio. The Beats Brand its self is hyped garbage. Any producer worth his studio time will tell you that. Now back to the crap company called HTC. They posted a profit good for them but in the long run after all of the litigation settles what will they have really made other than crap phones with a crap O.S. and being known for bad support if any. They are making their bed and setting themselves up for failure.

Now, I see why we are called faboys here. Does anyone look at the whole picture ?
9% operating margin is not that bad. 25% gross margin is not that bad too. I don't get why it will be a bleak picture. A revenue is just an indicator. The percentage matters more and the detail inside. What will cause the operating margin to fall ? Conservatism by saving up in the 4th quarter or 2013 to smooth income ?
With the current state WP is in, there is no way HTC will turn around by focusing on it. Hence, the recycled products. Focusing on WP means promotion, unique products proposition, unique apps, etc which mean more money to be invested without obvious return, either in long run or short run.
Nokia may up the ante, but until we see WP8 there is no way other OEMs will jump ship easily. With HTC Desire VC, people can play many multimedia formats easily. Just transfer it the folder by using USB and install the proper app. Voila! WP7.5 ? Edit here and there and limited format support.
Transform it to productivity tool. Transfer office files by USB and use Documents to GO.
See? WP has limited appeal and target demography.

I just ditched by Samsung focus to buy a used lumia 710. I agree the difference is night and day. Nokia makes a way better phone and provides a much better experience. I love HTC. My first smartphone was the s620 which was awesome in its day. But when it comes to windows phone, Nokia is all in. The others are just testing the waters.

HTC should focus it's resourses on quality and support, Instead of anounce new  halfgood phones every second month. Their strategy so far doesn't seem to work for them on android market and it won'd work on WP.   
They can't compete against Samsung. How could they possibly compete against Nokia? 
The soundinstance volume bug is still present on all of their first gen WP. In short, all SFX in games play at full volume!  look it up:
Apparently, they don't give a damn, they care only about crasing bugs, those who cause lost sales/returns.  
I own an HD7, it's a great phone.But this bug has caused great frastration to me and hundreds other developers, essensially limiting what we can do on games.
I dont want to see an API fragmentetion happening again.

I like my Titan, but apps and screen technology is where they need to invest and improve. Most of all, HTC have been passive to the changes on the market and played safe, not pushed through the intial ideas. HTC flashlight was a unique and great app....1 years ago and Sense never got that update that stopped draining the power out of the processors. Why can't we get navigation free? I feel like I can go on and while the failure isn't complete, its like HTC just gave up enhancing and growing there products when Windows Mobile went out. The feelgood is gone, its like they lost there confidence in them self. They need to get serious and start enjoy life and get out there and wield some muscles.