HTC profits down for the first time in 2 years, competition from Apple and Samsung to blame

HTC has just announced that for the first time in 2 years they’ve posted a profit decline. Income during Q4 2011 dropped to $364 million, down 26% from the same quarter a year prior. Worse yet, operating margins hit a 3 year low, it’s now just 12.8%. How many devices did HTC ship during the last 3 months of 2011? 10 million, compared to 13.2 million in Q3 2011. Where exactly did HTC go wrong? According to Peter Liao, an analyst at Nomura Holdings:

“Severe competition at the high end from Apple and Samsung forced their sales lower during the quarter. The key is when they can find their competitive edge, which may not happen until the second quarter at the earliest.”

Remember back during the summer when people were looking forward to the Samsung Galaxy S II and the HTC Sensation, then both of them came out and the former proved to be one of the best Android phones of 2012 while the latter was a dud? That’s one of the reasons why HTC is experiencing some issues. Another is Apple’s introduction of a $99 iPhone 4 and a free iPhone 3GS (prices assume a 2 year contract), both of which made people who were thinking of buying an Android phone change their mind.

This Nomura analyst says HTC isn’t going to get their act together until Q2 2012, which makes a lot of sense when you think about how the industry announces and then ships devices. We’ll see some phones at CES next week, but the real goods are expected at MWC in February. Devices announced there typically don’t hit the market until several months later, so we can potentially see the first half of 2012 bringing further declines to HTC.

What can change things? HTC desperately needs a new design language, they need to cut the bullshit with Sense UI, and they need to compete in terms of specifications again. At least that’s what we think, what do you think HTC should do?

  • Go all in with ANDROID !

  • Anonymous

    HERE WHY… 1. YOUR PHONES ARE THICK  2. YOUR SENSE KILLS BATTERY LIKE CRAZY 3. YOUR SCREEN AINT NOWHERE NEAR AMOLED AND RETINA    FIX THOSE 3 AND YOU BE ON TOP!!!   IF YOU REALLY WANNA BE ON TOP ICS LEAVE IT STOCK AND JUST ADD YOUR WIDGETS AND WALLPAPER

    • Gustavo Chacón

      (Y)

  • Anonymous

    B*llocks. HTC was tied to the Qualcom release cycle, which missed a step, unlike Samsung and Apple.

    Hence sub-par devices that couldn’t hold a candle to Galaxy S 2 and Apple 4S.

    Next spring with the new fully-integrated qualcom LTE-radio-SoCs things will turn again, if HTC can just source enough of high quality displays.

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