HTC loses $1bn from its share value
More bad news from the struggling smartphone maker, as it sees 45% fall in July revenues in face of Samsung
Published: 7 August, 2012
As it has warned, HTC is gearing up for a tough third quarter, suffering a 45% year-on-year drop in revenue for July. The impact of recent profit warnings has hit the Taiwanese firm's share price, and it has lost more than $1bn in value over the past few days alone, while its stock is down 50% so far in 2012.
Hard on the heels of a warning that it would report a weak third July-September quarter, HTC announced its July revenues were $834m, down from $1.5bn a year earlier and from about $1bn in May this year. Although it has some strong points, notably greater resilience in China than many non-local vendors are showing, it has seen slower sales in the US and Europe, its key markets. There, it is suffering from being squeezed between Samsung and Apple, and its high end, audio-focused One series has not yet made much dent on the leading Android family, the Galaxy S.
According to data from IDC, the firm shipped 8.8m smartphones in the second quarter, down from 11.6m a year before, and its global smartphone share fell from 10.7% in Q211 to 5.7%. Its strategy now is to continue to push the quad-core HTC One X and other flagships, but also to ramp up launches and distribution for emerging markets, particularly China, says CEO Peter Chou.
"The HTC One X is a very good product, but consumers are ignoring it over Samsung's Galaxy S III because of the brand," Gartner analyst Carolina Milanesi told Reuters. "It is almost like a kid going from junior high to college and still playing around as if it was a kid."