Profit

Launching a new console usually ends in profit loses for the company who dares to be so bold. Past consoles, including Sony’s PlayStation 3 and Nintendo’s WiiU, had lost money when they first launched; the hope is to earn back the money in game and accessory sales as the years continue on. Microsoft doesn’t see profit loss in their future though; the company has planned to sell their console close to cost and avoid the financial loss that most companies incur.

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Nokia has finally managed to turn things around. The company has reported a profit of €439 million ($585 million), with €8.04 billion ($10.7 billion) in revenue. These figures were possible through stronger Lumia sales, Nokia Siemens Network and company restructuring. We believe Stephen Elop is currently cruising around with a megaphone, ensuring everyone hears the news.

The number of Lumia Windows Phones sold also saw an increase to 4.4 million, up from just 2.9 million in the previous quarter. We'd consider this as Nokia's most successful quarter since the company partnered with Microsoft and began supporting Windows Phone. As well as profit and sales, Nokia also increased its net cash reserves from €3.56 billion ($4.7 billion) to €4.36 billion ($5.8 billion).

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Nokia has published its financial results for Q3 2012, which shows the interesting position the company has found itself in. Smartphone sales have fallen drastically, as well as net sales from the division. Likely down to the imminent Windows Phone 8 release and new Lumia family of smartphones, Nokia experienced a 56 percent drop in net sales. In Q2 the company shipped 4 million Lumia devices, a steep decrease indeed.

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HTC continues on its downward spiral

HTC has published its financial results for Q3 2012, showing a continuous fall in revenues that we've witnessed through previous reports. The company braced itself for a tough Q3 and revenues were expected to be in the region of NT$70-80 billion for this quarter. Hitting the nail on the head in the estimation, HTC's net revenue was $2.397 (NT$70.2 billion) for the months July through September, down from $3 billion (NT$91.04 billion) in Q2.

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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).

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$6.9 Billion profit? Not bad, not bad at all

Tonight Microsoft announced its Q4 results for fiscal 2012.  Everywhere you turn, the media is writing about how the Redmond giant just reported its first loss ever.  People writing these headlines are either clueless as to financial reporting, or in search of headline bait.  But since everyone is doing it, it’s pretty crap headline bait.

So here’s the simple truth:  Microsoft reported an extremely profitable quarter with respect to its regular operations.  On top of this it also made the decision to write down the value of assets pertaining to a company it acquired back in 2007.  The acquisition of aQuantive, a digital advertising company, didn’t contribute to Microsoft’s advertising platform as expected.  When stuff like that happens, you write down the value of those assets on the balance sheet.  The write down is a wave of the accounting magic wand.  It does not represent a cash expense. 

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It is hard to believe that HTC is having a rough year. After all, it seems like nearly every other day on Android Central a new phone of theirs is being released. Still, while they've shipped 25 million phones this year and their name is now well known, Samsung and Motorola have been grabbing the spotlight too, resulting in a less-than-stellar quarter in profits for smartphone manufacture. They're banking on a better year in 2012 where they estimate they'll ship 45 million phones and have some new "flagship" Android devices--devices which we already thought existed.

So why the sudden downturn? Over at PaidContent, they suggest two reasons:

  1. They're betting a lot on Android. With its cutthroat competition in Android hardware, banking on the lil' robot has high rewards as well as high risks. If you're a hit with consumers, you win big. But if you don't have a "killer device" that year, you can flounder. This is why Nokia went with Windows Phone--the competition was less one-upmanship and they could really stake their ground instead of being just another player.
  2. Patent costs. While Android once promised to be the "free OS" for OEMs in which they could reap pure profit, it turns out a lot customization to the OS by HTC in addition to the patent costs (due to Microsoft gaining licensing agreements with them) has hit their bottom line.

Of course this doesn't mean that Windows Phone will be their savior either, as our market share is still tiny. But perhaps if HTC starts putting more resources into that camp and growing the market, they could hedge off any looming Nokia threat. And yes, HTC should be very concerned with a looming Nokia, especially in the U.S. come 2012.

Source: PaidContent/Yahoo! Finance

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Looks like everyone is doing their Q4 reports this week. First was Microsoft and now HTC is reporting huge numbers this morning, including a whopping $3.3 billion in revenue and doubling the amount of phones shipped from 2009 to bring them to roughly 25 million total phones brought to market. Not to shabby for the OEM who went public about 3 years ago.

On top of the news, they expect Android to keep going strong and yes, those huge numbers are mostly Android related. They also see WP7 doing well but they had nothing significant to say on the matter outside of they saw "tremendous opportunities" for customers using the new OS. Plus launching five phones with the new OS shows certainly shows their commitment. They rival Samsung for #4 maker in the world, falling behind Nokia, RIM and Apple.

Source: Reuters

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