HTC yet again continues to slide downwards with drops in revenue and profits

HTC has released the financial report for Q4 2012, which shows the company continuing to struggle in the competitive mobile phone industry. We've previously covered HTC's down spiral through recent months, but it's set to continue despite the launch of new hardware, including the Windows Phone 8X.

HTC revenue and profits continued to fall in the final quarter of 2012, with the company reporting NT$60 billion ($2.03 billion US), down from NT $70.2 billion in Q3. The report also illustrated a gross margin of 23 percent and operating margin of just 1 percent - down from 25 and 7 percent respectively. Net profit and earnings per share fell as well, the former from NT$3.9 billion to NT$1 billion, while the latter collapsed from NT$4.7 to NT$1.21.

It's not looking positive either as HTC expects the situation to worsen in the first quarter of 2013, predicting Q1 revenue to be in the region of NT$50-60 billion, with a gross profit margin between 21 and 32 percent and operating margins between 0.5 and 1 percent. That said, HTC CERO Peter Chou is relatively optimistic publicly about the company's prospects this year:

"We continue to focus on the most important element of our business: innovation. Our teams are delivering beautifully designed phones, containing the newest technological advancements. Outstanding products, paired with improvements in our marketing execution and overall readiness give us reason to feel optimistic about the progress we will make in 2013."

HTC is still releasing its Windows Phone hardware into the wild with mobile operators only just catching on and pushing out the smartphones to consumers. We'll take a gamble and bet that Q1 will be more troublesome for the company. It's a shame as both the 8X and 8S are great handsets and the manufacturer has surprised many with the innovative design.

via: Android Central

Rich Edmonds is Senior Editor of PC hardware at Windows Central, covering everything related to PC components and NAS. He's been involved in technology for more than a decade and knows a thing or two about the magic inside a PC chassis. You can follow him over on Twitter at @RichEdmonds.

104 Comments

Man, I thought they were making progress.
Its a shame. In android they're beat by Samsung. In Windows Phone they're beat by Nokia.
But, HTC has the ability to compete heavily with Nokia. That's why they need to focus more on WP, and less on Android. It worked for Nokia.. And, I love Nokia, and my 920, but seriously, if HTC were to do what Nokia did and completely go with WP they would be hard competition for any WP vendor including Nokia. I think with the Android market so flooded one of these dams has got to burst, and the next one might be HTC... This would be good for WP as long as HTC's waters come flowing in MS's direction.
HTC needs to step up their game now. Samsung does eye tracking so you can finally read a phone in bed without disabling orientation lock and split screen, as well as a stylus on the Note. Nokia's got OIS and 41 MP sensors (soon hopefully) and high-refresh rate screens, while HTC just makes good phones. Samsung used to differentiate with a cheap iOS knock-off UI, but then got serious. HTC is still doing Sense. The time of lame, half-hearted differentation for differentiation's sake is over.

HTC could make a good start with Android if they would just ditch Sense. If their phones were like Nexus phones (even if not labeled as such), people who want the stock experience and reliable updates would get HTC phones. They could beat Samsung by releasing updates really fast since they wouldn't need customize it as much. This would make them competitive _and_ save them effort.
On Windows Phone they should make an iPhone-sized phone for those who resist the giant phone movement, and a larger "HTC OneNote" with a screen digitizer. MS should support that with a pen-compatible version of OneNote. Beating Nokia at the added value game on ordinary phones would be harder.
I used to believe that Sense is the reason for HTC's continuing down-slide in Android - and that stock Android is their saviour. I'm not too sure anymore because if that were true, then the Nexus would be the top selling Android phone, especially with its cheap selling price. Yet the Nexus is beat regularly by more expensive SG3 and SGN2. I don't know what it is but the answer lies elsewhere.
Asking MS to make an OEM exclusive app should not even happen.
No HTC needs to attend to past customers I see the thunderbolt getting ice cream sandwich but not any of their windows phones getting 7.8 some don't even have tango and they havent updated or added new apps since mango. If people get dissatisfaction from HTC once they probably wont take that chance again. My nokia N97 mini still gets updates for bug fixes and nokia app support to this day and it came out in 2009.
The people that haven't gotten Tango is because of their carrier, and you're also wrong about 7.8. My Titan got it, and not from cabs, or tricking. Got it right away from plugging into computer, and so has others.
Agreed! Based on my experience, I have far less interest in buying the 8x or any other HTC devices after they decided not to give us the final update. I still haven’t seen any explanation from HTC. I was understanding when we didn’t get the upgrade to WP8. Our devices aren’t compatible with the software. However, the decision to let us continue running WP 7.5 even when there is a final update available, a minor one meant to appease us, at that, is inconsiderate.
As a business owner and consultant to the Fortune 100 you can be sure that we go the extra mile for our clients. In fact, they demand it. I wouldn’t dare risk losing a client in a manner like this. By the way, if this happens to be a T-MO decision, the same goes for you. Perhaps it’s time to consider another carrier. Shame on you! I’ll be should to share my thoughts directly with both companies during my next call. :(
It wasn't HTC's decision to not give you the update it was the carriers decision. WP needs HTC, and any other vender, like crazy to succeed. Things are going to turn around for HTC because there's to much at stake for them to give up, and not improve. Just remember it's these carriers that are making it hardest on the users, and WP. They are the ones who continue to put WP last.
I think there's plenty of room in the WP8 ecosystem for another SERIOUS vendor ... which I do not think HTC has been.
Ya same here, too bad because I love htc hardware :(
Have Titan 1; hope HTC tanks hard.
Ouch. I don't blame you for feeling that way.
I guess everyone has their own experience, but i too have a Titan 1 and really like it. I'm out of contract and am hoping HTC announces something nice at MWC, although i really like the rumors of an aluminum-bodied Nokia too...
I'm with ya!!!
Don't wish for that because right now WP needs HTC to succeed. Nokia alone is not going to cut it. You should be hoping that HTC focuses a whole lot more on WP, like Nokia does, and that they succeed at that.
I have the titan II... I hope they burn also...
I have the HD7 replacement device #4 I did not upgrade to the 8x on T-MO I'm waiting another month to see what happens in round two of WP8 but it will not be an HTC product they just do not support what they make, rather they issue a new device....
I had a Thunderbolt... I hope they fail...
Any phone that comes from Verizon is entirely their fault not the manufactures'
I have a HD7... Best phone I've ever had. I was hoping for more impressive WP8 hardware which hasn't happened. I hope they succeed, even though I'll probably join the Nokia bandwagon when they have a flagship phone with microSD.
It was a great phone until it just died one day. Will neve buy another HTC phone.
Would have gotten it had it not had a FIXED 16g of space. Very "innovative" with that decision.
Yeah... I have 16 on my HD7 & it's always full. I can barely have any music or photos anymore. I was hoping for a 32 GB + 64 GB microSD offering from either Nokia or HTC, but both failed to deliver on their flagship phones where it should be standard.
I would have rather had an HTC 8X, but they messed up giving it only 16gb non-removable storage when the 920 has 32gb :)
I blame HTC's marketing. When Windows Mobile 6.5 still was used, they were the first ones to really boost the smartphone market. They did that again with the HTC Desire with the Android OS.

But they started to fall behind. I don't think because of their new phones(the One and One x+ are beautiful phones if you ask me), but because of the marketing..
Compared to Nokia and Samsung there is no HTC marketing worldwide. No wonder they fall behind if the nobody knows they still exist. And they weren't that famous to begin with, as they never sold feature phones, and the smartphone market was small until 2010.
I agree. My HTC Desire was my first proper smart phone. Terrific in so many ways. Camera was not the best though. As for Samsung, I genuinely dislike virtually everything that they have produced so far. I thought the galaxy range was tat. The 3 may be ok, but looks dogger.
HTC will get gobbled up by someone...perhaps Lenovo.
The question is...when??
The problem HTC is having is that it does not support their old phone so people when there contract is up won't buy from them
True that. Had an hd7 and build quality was meh. Now a Nokia man. Wife has a radar which had better build quality but I'll probably get her a Nokia next as well.
That what I'm talking about sure people will say HTC does not make money from old phones. True but you do make more money when they upgrade in 2 years. If you don't give them the updates they won't be happy and won't buy from you again they will go elsewhere
We had 3 HD7's. I loved mine. However, I've upgraded two to Lumias (one just yesterday, the phone will be here Wednesday) because of Nokia's commitment.
+1, I know I will never buy from them again after my Titan (zero updates ever) experience. Too bad because their hardware is good.
+1 to that. So disappointed with the Titan.
Yes, loved the Arrive and although it's not entirely HTCs fault, they never tried to push the tango update even though it was a serious problem.
Stop dropping support for your older customers, and they might show some more support with their next purchase. Half the reason I picked Nokia over HTC, is because of both of their track records. One updates the he'll out of their devices, the other labels a two week old device with a "obsolete" tag.
Eaxtly why I switched from a HTC titian to my Lumia 920. Nokia was the obvious choice simply brcuz I know they do an excellent job support old and new phones. Always sending out updates, exclusive apps, ect.
How does Peter Chou still have his job?
Lol I agree
Probably because under him they had multiple record setting profit quarters.
Over here Operators have only now received the new Lumias, while they have had the 8X since it was launched. Thing is: people prefer Android and iOS, and when they go for Windows Phone, they rather go with Nokia than HTC. I've seen a few people with Windows Phones and they were all Lumias. I've NEVER seen anyone with an HTC. So I'm not surprised.
When there is a clear winner, most people will only want number 1. For Android they would go for Samsung. For WP8 they would go for Nokia.
Precisely.
HTC has piss poor support for their products. Jinxed designs... Meaning they take a great idea and botch it with poor quality or with gimped specs. And they have way too many variations.
It might have helped if HTC had elected to give us WP7.8! A little good will would go a long way toward maintaining brand loyalty..
Looks like its time for MS to swoop in and save HTC,, but not without the full Nokia treatment from them. That means they would start focusing on WP much more... Of course I don't expect them to abandon Android, but they are having a hard time competing in that market, so its time for them to fight heavily for WP share.. This is what needs to happen for these guys to bounce back.. Its just a win win situation for anybody with vested interests in WP.
No MS should let HTC die they don't give a damn about WP so why should MS help them out they are 100 % on Android only 10% rolling on WP. They can just be killed by Samsung for all I care they took a bet and they going to lose
How can you say that HTC doesn't give a damn about WP? Before Nokia started to release WP devices HTC held the most WP share. Also, with their recent commitment to WP, and building"hero devices", it shows that they are realizing that WP may be their future. Nevertheless, WP needs as much help as it can get, and HTC ain't going nowhere no time soon.. You should never wish for WP to cut ties with any vendor,, ever!
They don't give us exclusive like Nokia strive for so what do they expect
Was excited about the 8X when it was coming out but when I went down to the ATT store and finally held it in my hands I wasn't as excited with the phone as I hoped for. Two phones down from the WP8X was the new love of my life my L920. Happy I decided to go with Lumia instead of HTC.
I actually wanted the Lumia myself but its an AT&T exclusive
yeah returned the one x for the lumia920 i had flashbacks of the piss poor support of thier devices, never again
This isn't a popular concept with people here, but maybe HTC should have gone for an exclusivisity deal with Verizon. Hear me out on this. They can't compete well with Lumia 920 on AT&T because AT&T gives 920 a better subsidy and more marketing (and is arguable a better flagship anyways). So why not try to strike the same deal with Verizon. Imagine what could have been if they had secured a better subsidy and more marketing with Verizon.
Lol Lumia is killing them on Verizon and we got the 823 instead of the 920 HTC is dead in the WP world
Why won't they drop? If they are ripping HD7 users off with the WP 7.8 upgrade. I feel for them no more. This HD7 is my last with HTC....idiots!
Love this unfounded whining... Guess what -- HD7 DOES have the 7.8 upgrade... updated mine with Zune last Friday... Don't give up so easily. HD7 is/was a great device when it came out over 2-years ago. And still supported by HTC. HTC Rocks!
Really? Cuz I posted in the forums to find out if anybody with HD7 has updated to 7.8 and all responses I got were force updates and through Seven-Eighter. Glad to hear you've updated, will keep my fingers cross. HTC if my favorite OEM and will be really sad and disappointed if they do anything against me.
700 000 Nokia phones in the U.S, why would HTC turn things around with Windows Phone?
Apart from lack of support I think HTC is also not really bringing anything really new to the table. They seem to concentrate on just releasing phones with the latest hardware but dont really do anything to innovate on the software side. Their bundled WP apps are pretty much the same since they released them at the WP7 launch, and they arent doing anything new in hardware. So I think its no surprise they are struggling.

And with Nokia probably going to come out with the 41MP monster and Samsung sure to sell whatever galaxy they release next HTC needs to come out with something special to stop the slide.
That sucks because they're my favorite manufacturer for Android and WP
Looks like next Microsoft bite.
Thats what happens when you dont update the HD2 and the HD7, the customer leaves!
The HD2 had nothing to do with HTC. MSFT decided not to support changing the HD2 from WinMo 6.5 to WP7.
It is sad to see. Almost all my phones are HTC phones until Sense on Android got too heavy and finally made the switch to stock Android and now, a Nokia Lumia. I think the only thing that can help them a bit are massive cuts to staff and products. They still make too many phones. They just need to make one great Android (stock) phone and one great Windows Phone, and focus all their efforts on them.
That's the business world, survival of the fittest. I never owned a HTC phone but I've heard horror stories about them. I would love them and Nokia to be the top dogs on WP and honestly I don't like Samsung's windows phones they look like rebranded galaxies. Nokia Lumia ftw!!!
HTC will always have a special place in my heart for the amazing devices they made but recently I had to go with the Nokia Lumia 920 because of the camera and bigger battery. Also Nokia devices have way better antennas(reception) than Samsung or HTC imo
I remember my first HTC Touch Diamond back in 2008. That was my favourite phone despite its failings. So when the chance came to upgrade it was a no contest, the Desire was first choice.
That phone was brand new barely a month old and rumours were around that a new Desire HD was to be made. It boasted a new "Sense" overlay and an updated version of Android. I only received one update froyo 2.2 and after 6 months I read it would no longer get anymore updates. I was so p••••d off that I sold my Desire and bought my first Windows Phone 7 device. What a revelation that was, especially after the HTC fiasco. It was a Samsung Omnia 7 which had great build as well as a fantastic 4" screen. After managing to update it to 7.5 I eventually realised I had bought a dud, especially with Samsung's lack of software support and hopeless hardware.
I have now purchased a Nokia Lumia 800, it was too cheap to ignore, and is now rocking 7.8 :-). It's the best decision I've made as Nokia have superior support and superb hardware too. I will be purchasing another Nokia when they release a new device, maybe a 41+ mega pixel beast.
HTC have lost the advantage of their "Sense" overlays and software once had. I still think that they make better hardware than Samsung, but they have lost the feel good factor of owning an innovative phone which will have a lifespan of more than 6 months.
All of there Windows 8 phones are all half baked! Come out correct from the beginning. Big 4.7 inch screen minimum, 32g SD card minimum, 2500mah battery minimum, exclusive HTC apps, and market the hell out of it. And release it on all carriers at the same time.
I am an individual that gets to use all hardware and platforms. I personally have the 822 and 8x (would love a 920 but not on VZW). Out of all the phones over the last few years released I will say the 8x is one of the most iconic devices I have ever used. I would rank top five hardware designs in last five years would be Nokia 920, HTC 8x, iPhone 4, Motorola Droid (original), and blackberry 8330. List based on impact by design when released. Best OS windows hands down and this is coming from someone that uses them all. Trust me Windows is on to something special I just hope they see it out as it will take a while for the momentum to get going.
I could agree with that except for the inclusion of the blackberry. To me, it looks basically like every other blackberry ever made (except for the storm, I guess). Not very iconic in the same sense the other examples you mentioned are.
Will we see an 8x+ with a bigger battery and 64 GB storage?
Lol what do you expect? Selling the 16gig 8x for $199 vs Lumia 920 with 32gig for $99 at launch. The price point was not even competitive. My wife wanted the 8x but the price difference was why she ended up with a Lumia.
Nokia also gives free charging plate, making buying 8X looks extremely stupid on ATT
HTC not struggling. Most of there phones are Android and few wp
Time for change. Time for better customer service.
rodneyej, the only problem is that Android has an honest 100x the daily activations as WP. I love my Trophy and WP 7.5, but as a hardware manufacturer Android is the place to be.
Look at LG, the latest Nexus phone maker, they could barely keep them in stock & just now are available. Rarely a problem for any WP handset.
Having more than one OS is wise, but you should never have all of your eggs in one basket.
I feel badly for HTC, but they have to follow the sales & activations or their stockholders will fire Mr. Chou and the rest of his board.
Pretty much all the Android OEMs, except Samsung, are struggling. LG just announced that they sold a million Optimus G globally. With all the gargantuan specks parked in that device with a beautiful industrial design one would have thought that beast was going to smash the hell out of the GS3 but they only managed a to sell a million of that device globally. Mind you the Nexus 4 is heavily subsidized by Google and if HTC was 8x for $350 unlocked trust me even Eric Schmidt and Tim Cook would line up to purchase that sexy phone.
If HTC goes down it is bad for Microsoft, good For Samsung and Nokia. I would prefer they stick around as more choices are always better. But now Huawei is launching and hopefully they ramp up sales as well.
Problem, they release products left and right without brand recognition. More or they have no direction.
HTC is in trouble. They can't compete in Android b/c Samsung crams it's Android phones with the latest edge tech. Google is about to intro the X phone. They need an angle....be the only manufacturer to offer pure Android and reduce Sense to fancy widgets. Continue to offer a unified Windows phone lineup on a 6 month refresh cycle.
That's what happens when you don't allow users to update their phones. No tears here...bye bye HTC
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Why can't these posters be banned based on ip address and these posts deleted?
HTC needs to stick with one naming scheme. Nokia has Lumia. Samsung has Galaxy. What does HTC have?
They got Mr. Chou who needs to be fired asap!
I would've picked up the 8X over my L920 if not for Nokia's custom software and app exclusives. In fact, I bought one for my wife, but she exchanged it for an L920 after two separate 8X devices experienced screen cracks and chips. We both actually liked the 8X better in terms of design. It just wasn't as robust an offering as the L920.
Wanna know why? The application selection is LACKING and the OS needs more updating more often. Yeah, the design is great but they are ignoring its functionality. There wasn't even an official Twitter app for 8x until a week ago. I mean....thats basic shit guys. C'mon people....Im going to switch to iPhone 5 or Nokia Lumina if this over slacking continues. I'm very disappointed.
Plenty of great third party twitter apps, try rowi, and the os is the same for Nokia, Samsung, and HTC, why is Nokia doing so much better? A major release from Microsoft is due 1st quarter of this year. How many exclusive HTC apps does the 8x have? Where is the marketing? For my needs I have found almost all the apps I had on my Android. As wp8 grows I expect those apps to get filled in as well.
Easy solution, for some reason WP hasn't made it to carriers like Metro PCS, Virgin, Boost or Cricket. Those markets are flooded with Android devices and are just begging for Windows Phone. Come on even Apple has realized this and now the iPhone is avilable for both Cricket and Boost Mobile. Wake up HTC!!!!
HTC should quickly release a 4.7 inch WP8 based on the OneX with 128Gb internal memory. Also the 8X needs 32 and 64 Gb variants. HTC needs to learn how to sell direct without data plans. There is no money in low end or mid range, the money is in high end devices. I don't believe in taking prisoners when it comes to business, you need good products and marketing and you make sure your competition is tangled up in scandals.
I love my 8x. :(
I also love my 8X... Great phone.
Crap brand name and their products tend to be ugly. The quality of their designs needs to improve.
The last I checked the 8x got some solid reviews and not all their phones are crap. Even some of the people here bashing HTC like their new designs. So get a life and don't waist your time making stupid comments.
One thing I do not understand... Why fixed memory designs with only microSD to expand. HTC should design a phone with a base 16Gb memory and a real fast memory module slot taking up to 256Gb of real fast memory, something much faster than microSD. Ideally such a device should also have a microSD slot for up to an extra 64Gb.
a) Then users can pack some real stuff on their phone.
b) HTC can sell the modules for a good profit.
c) The vendors (carriers) only need to stock one memory sized model. So if the customer wants more memory he just buys a module and ads this to his phone.
There is no profit in cheap phones like the 8S... Windows Phone 8 is pretty hard core... So HTC should make some real hardware... not some more "me too".
If you want a brand to go up market you must be able to deliver solid performance and offer more than the competition. You can sell cheap stuff all day and not make much money... but if you manage to sell High End smartphones in the $800 to $1'200 range and create demand... than you make money. But you only get there if your design is superior.
The S3 was a superior design when it was released. MicroSD slot, large screen, inexpensive to make. Sure enough it sells well. Also because a buyer can tailor it to his needs to some degree.
I've been with HTC since Diamond and wm 6.1. Through the years HD2, HD7, Titan and a Flyer have found it's way into my hands. But the lack of support and upgrades has been a problem. And with the WP8 range from HTC not living up to expectations, I have turned to Nokia. I really hope HTC get their act together and release a proper flagship phone. I want that HD2-wow feeling back.
8x overpriced, 8s underspec-ed. and with 7.8 update I can hold on to my Mozart for a year... :)
I don't think Mr. Chou knows the extent of his companies decline. He's a flip flop. The One series was suppose to be the new brand recognition moving forward. Nope! DNA, M7, Butterfly, etc.. What are those!? Where is the One X2 or how about the HD8 or Titan3. Every product that comes out has some new name but same look with the same tasteless Sense UI. Innovation doesn't have to be the first to put 1080p screen or quad core. Innovation is everything. Maybe you need to innovate your design or improve your 3D screen, improve your UI to make look and feel wanted, exciting, natural, exotic, or what not. Maybe HTC is at the peak of Android and its time to move to other venues. Mr. Chou, you need to step down.
What's killing them is there batteries. I am a mobile rep and when you speak to customers that's the second thing they say. "They have great phones but there battery sucks" if they can get away from that stigma they'll regain that lost ground.
Can't tell how good the 8x is yet. Mine bricked a few hours after I received it. I should have a replacement tomorrow. HTC said it sounded like a hardware issue.
HTC has to focus with wp and focus less with android.. I suggest they make low end phones and not so much high end, because the new thing is here.. That plastic SAMSUNG GALAXY SHIT

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