HTC faced another low-blow for the second consecutive financial year after it could not show any profit margins. The company CEO Chia-Lin has therefore decided HTC has apparently had it with low-cost, low-margin smartphones. Now, it will be focusing its attention only on its flagship series – like the U Ultra and U Play.
HTC’s Loss Spiral
The company’s failure to turn a profit this quarter has impacted its shares badly. In the final quarter of last year, HTC took in $722 million and recorded an operating loss of $117 million, a minor improvement from Q3 2016’s loss of $133 million.
The company is now not the powerful brand it once was. Heavy competition from the likes of Samsung, Apple, OnePlus, Micromax among others have pushed it out of the smartphone market and it seems that the smartphone giant has a long curvy road ahead for recovery.
According to analysts at the International Data Corporation (IDC), high-end phones accounted for around 57.2 percent of its smartphone shipments in the third quarter of 2016. So naturally HTC will be focusing on its high end flagships while the mid-range phones bite the dust.
The reason for this is the fact that HTC cannot sustain itself in a market against competitors like Oppo, Vivo and Huawei. These brands are all selling mid-range secs with specs tenfold, so to speak, better than what HTC is currently selling. HTC just does not have the resources to make its phones cheap as well as powerful.
Concurrently, they have had huge losses in the mid-range smartphone market which they don’t have the resources to compete against.
Falling Market Share
Late last year, new estimates showed that Apple took 103.6 percent of the profits from all smartphone sales in the third quarter of 2016. By comparison, Samsung captured just .09 percent. HTC was nowhere to be seen on the list.
The latest flagship of HTC called as the U11 did not hit the market as spectacularly as it had expected at first. Competitors like Samsung’s Galaxy S8 with its infinity display and iPhone 7 Plus with its dual camera fast put the device out of play. The specs of the phone were spectacular to say the least. The premium unibody glass design of the phone along with high benchmark ratings in the month of May 2017 worked in its favour though. However, for the price tag of $720, people preferred to buy the Samsung instead.
However, the company announced that it will introduce a mobile VR headset by the end of 2017 “designed to work with the U Ultra.” Last year, HTC split off its virtual reality business into a separate entity and announced Vive X Accelerator, a $100 million incubator with the mission of investing resources in promising VR games and experiences.
More recently, it announced a $10 billion VR Venture Capital Alliance and launched Viveport, a VR-focused storefront, on mobile devices.
Investments like these are the only hopes of HTC sticking around in the mobile market. But it will still get hefty competition from the Samsung’s VR headsets made exclusively for the Samsung Galaxy S7, S7 edge and S8 devices. It is also rumoured that Apple will be announcing a VR series of their own for the iPhone 8.
Are you holding on to your HTC device? Or would you sell it?