HTC predicting first loss in their history, is it as bad as it sounds?
The next quarter looks bleak for HTC, despite their latest flagship – the HTC One – “performing well” and outselling any of last year’s models; this trend will not continue into Q3.
In fact, for the first time ever, the company predicts a loss of up to 8%. But is the situation as bad as it sounds?
First let’s take a look at the stats - the Taiwanese manufacturer expects its operating margin to drop between 0 and minus eight percent in Q3, down from Q2's 1.5 percent. Gross margin is thought to hit within the ranges of 18 to 21 percent; down from the previous quarter's 23 percent.
Finally, and most critically, revenues are expected to slip to between NT$50 billion and NT$60 billion (roughly $1.67 billion - $2.01 billion).
Where the fault lies - according to HTC - is little penetration in the mid-range, something which may be rectified by the upcoming HTC One Mini. However, there’s an elephant in the room (and a huge one, even for an elephant), Apple.
The Cupertino-giant is thought to be releasing a cheaper iPhone in the next few months, going by the moniker of 5C (the ‘C’, we presume, is for colour) thought to arrive in a variety of fluorescent flavours – which we all know will be incredibly popular.
It’s a real shame - if the new 5C takes on the specs of the current iPhone 5 - the HTC One Mini would remain superior in almost all hardware-based departments. Perhaps, if HTC held off and could make the price more attractive than Apple; they’d have a much better chance at making Q4 positive.
The company already states that "actions have been taken" to combat all of its problems by Q4 - including a range of new mid-tier products.
HTC also mentions their flagship One has had a positive effect on the way its brand is perceived; which many reviewers - including myself - have praised for its unique looks and innovative features. Most importantly, the phone marked a departure from the understated looks of previous models.
We’ll report back on whether their “actions” have worked when we get a chance to comb through the Q4 results.
What do you think about HTC’s outlook and current position in the competitive market?
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