HTC blames problems on poor marketing
Net income in fourth quarter falls to lowest level since 2004 but CEO promises new campaigns and devices this quarter
Published: 7 January, 2013
HTC's CEO Peter Chou was making new year's resolutions last week, primarily to revive the handset maker's fortunes by improving its marketing. The pressure is mounting, as the firm reported its lowest net income in eight years for the fourth quarter.
While HTC was widely acclaimed for its marketing campaigns in 2011, which helped establish its brand and Android smartphones in Europe in particular, it lost its momentum in 2012, with its market share sliding despite some high profile launches. Chou said weak and badly executed marketing was the main culprit and that he is determined to change this in 2013.
In an interview with the Wall Street Journal, he admitted that HTC had not marketed its flagship One range sufficiently aggressively, and revenue had fallen year-on-year for four consecutive quarters up to Q312.
"The worst for HTC has probably passed. 2013 will not be too bad," he said in the interview. "Our competitors were too strong and very resourceful, pouring in lots of money into marketing. We haven't done enough on the marketing front." He added: "Although we don't have as much money to counter [Samsung and Apple], the most important thing is to have unique products that appeal to consumers."
In November HTC appointed a new chief marketing officer, Benjamin Ho, who reports directly to Chou.
HTC's global smartphone market share has declined from 10.3% in the third quarter of 2011 to 4% in the third quarter of this year, according to IDC. In Q312, HTC reported a 79% decline in profit and a 48% drop in revenue; and income declined to its lowest level in six years. And in its Q4 results, just announced, HTC delivered net income of $34m, its lowest figure since 2004, though at the high end of analyst forecasts. Revenue fell 41% year-on-year to NT$60bn.
The company suffered from a lack of new models in the quarter, at a time when Apple unleashed the iPhone 5, though it will unveil a new flagship, codenamed M7, during this quarter, as well as models for China and the Butterfly device for Japan.