HTC Sees Profits Slide

HTC’s first quarter net income was $151 million (£95m), the company announced on its website on 6 April, in advance of its full earnings announcement. The figure represents a 70 percent decline from a year earlier, according to a report from Bloomberg, and follows from mistakes made during the quarter before.

Following the April 2011 introduction of the Droid Incredible, HTC was hailed as a newly elite brand in the US smartphone market. Boasting quarter-to-quarter growth of 30 percent, one analyst celebrated it as having gone “from the edge to the cutting edge”.

Lessons learnt

Almost exactly a year later, on the heels of its HTC Evo 4G LTE introduction and HTC One X release, as well as the eve of its fiscal first quarter 2012 results announcement, the company is looking more like a dropout than a darling.

“We simply dropped the ball on products in the fourth quarter,” HTC CFO Winston Yung said during a 6 February conference call, according to the report. “The form factor could be better and the product design could be better. So we’ve learned lessons from the fourth-quarter products.”

Apple’s iPhone continues to sell at a strong pace, and HTC has additionally lost market share to fellow-Android-supports Samsung, Motorola and LG Electronics. Nokia, with its high-end Lumia 900, which has access to AT&T’s LTE network in the US and goes on sale on 8 April for just $100, also hopes to be a market disruptor.

In February, HTC introduced the One, an LTE-enabled device running Android “Ice Cream Sandwich” and HTC’s Sense 4 user interface and featuring a 4.7 display and a 1.5GHz dual-core Snapdragon processor. To sweeten the deal HTC partnered with cloud storage provider Dropbox to offer 25 gigabytes of free cloud storage for two years. It’ll come in three flavors – X, S and V.

In a review of the X, a global version and the most powerful, The Verge’s Chris Ziegler described it as “conservatively … the most important event in the company’s history since the release of the groundbreaking Evo 4G” and a device that oozes HTC from every nook and cranny. “There’s no superfluous, counterproductive meddling in the design process from carriers,” he writes, suspecting all the extra cooks have been shooed to the dining room.

Focus on quality

The Evo 4G LTE, which will go on sale on 7 May, also runs Ice Cream Sandwich, features a 4.7-inch display and 1.5GHz processor, and will have access to Sprint’s LTE network.

HTC’s plans these days, President Jason Mackenzie said at a 4 April New York City event for the device, is to make fewer phones but to make them better – a sentiment that echoes January comments made by Motorola chief executive Sanjay Jha, about Motorola’s plans for its Android lineup.

In March, HTC reported that consolidated sales were up from February, though still down compared to its year-ago results.

“If it can keep up the trend seen in March,” Yuanta Securities analyst Bonnie Chang told Reuters, “we would expect to see a pretty strong [second quarter].”

How much do you know about smartphones? Take our quiz.