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HTC Is Struggling With Market Sales...Reduces Number Of Smartphones Production

Struggling Taiwanese smartphone manufacturer HTC is cutting staff and shrinking the number of smartphones it makes, as its profits nosedive.

HTC, once a key player in Android and Windows Phone smartphones, has stumbled in recent years as competition from the dominant player Samsung and smaller, cheaper rivals has cut its market share.

The company announced on Thursday that it had suffered its biggest ever quarterly loss of $253m in the three months to June, down from a net profit of  $82m for the same period last year and a $11.3m net profit in the first quarter of the year.

The deficit was triggered by “weaker than expected demand at the high end … along with weak sales in China”, the company said in a statement, which said third quarter revenues were forecast to fall to between $600m and $694m.

Chinese homegrown brands such as Xiaomi, Lenovo and many smaller players have undercut HTC with similar devices, while Apple and Samsung have squeezed the top end.

“Like Nokia and Blackberry, few smartphone makers are able to turn around once they lose in the battle for marketshare. Consumers quickly forget you,” said Jeff Pu, analyst at Yuanta Securities Investment Consulting.

Pu said he did not see an end to the company’s downward trend. Unlike BlackBerry or even Microsoft’s Nokia, HTC does not have other businesses or services to fall back on.

As global market demand declines, the company has pinned its hopes on new product areas like virtual reality, including forthcoming headset HTC Vive.

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