HTC ends 2012 on a disappointing note; confident about reversing slump in 2013
HTC is expected to announce a 90 percent dip in profits in the last quarter of 2012. CEO Peter Chou admits lack of marketing is one of the reasons. Company will now focus on the Chinese market, and certain emerging markets, to drive up revenue.
HTC had a fairly bad time in 2012, and that fact got reinforced when HTC gave a disappointing outlook on the first quarter, in what is basically a hangover from the slump the company went through last year. It is expected that the company will announce that profits fell by as much as 90 percent in the last three months of 2012. This is the basis of the bleak expectations for the first quarter of 2013 ending March, with revenue expected to drop 17 percent overall.
HTC said it expects first-quarter revenue of T$50 billion to T$60 billion ($1.69-2.03 billion). That compares with T$60 billion in the fourth quarter and T$65.75 billion a year ago. Analysts had forecast HTC would earn revenue of T$62.77 billion for the quarter.
HTC’s CEO Peter Chou, meanwhile, analyzed the reasons for the slump. He pointed out that strong competition coupled with lack of marketing from their end added to the troubles. “Our competitors were too strong and very resourceful, pouring in lots of money into marketing,” he told the Wall Street Journal. “We haven’t done enough on the marketing front.”
HTC, has very categorically, stated that it will now focus heavily on the Chinese market as well as emerging markets, looking for volumes in an attempt to claw back the decline. HTC Chief Financial Officer Chang Chia-Lin told a conference call for investors on Monday that HTC, which has till now relied on developed markets for most of its revenue is now ready to offer smartphones priced less than 1,999 yuan ($320) – currently its cheapest phone in China. “We’re going to go down, but not below 1,000,” he said. “We see there’s still room to play” in 1,000 to 2,000 yuan phones.
But this ride will be quite tough for HTC, considering Apple CEO Tim Cook has pointedly mentioned China as the driver for company’s growth in 2013. With the rumours of lesser priced iPhones just not going away, HTC could do well to speed up the process at its end.
HTC is all set to unveil the next flagship smartphone, the M7, to the world this month.