HTC predicts first ever quarterly loss, despite the success of the HTC One

Not even the release of what many regard as the "smartphone of the year", will save HTC from a quarterly loss.

HTC is set to report their first operating loss in the company’s history for Q3 despite the success of its flagship phone the HTC One.

In a statement released today, the company expects to post losses of 0%-8%, blaming a “higher cost structure, lack of economy scale" and "provisions needed" to clear its ageing products. The overall gross margin is also expected to decrease to the range of 18 to 21 percent, down 23 percent from the last quarter. 

The decline has not come as a surprise, as analysts and industry watchers had already predicted this decline ever since the preliminary report was made public at the beginning of the month. Peter Liao, a Taiwanese based analyst, says "HTC may have new products in Q3, but competition from other brands are fierce".

This is a huge setback for the company, founded in 1997, as it competes for a place in a market dominated by Samsung and Apple.

Despite this, HTC are remaining optimistic and revealed plans to launch “innovative” and “competitive mid-tier” products in order to recover in time for Q4. The HTC One mini is expected to be released as a part of the recovery after it was announced earlier this month. They also assure their shareholders that the loss is not expected to continue, citing an "optimisation of organisation”, and promise a “brighter future for HTC with the best and most exciting products”.

Source: HTC | Image via Droidlessons

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Having bought a HTC One myself, i'd say HTC is trying to do better. And frankly it worked with the One, it's an excellent phone.
Hopefully HTC can keep innovating and get back to it's former glory. Time will tell.

I don't know how's HTC doing in Europe, Asia and Oceania, but I have the impression that HTC despises America (the continent) and Latin America mostly.

In Mexico, for example, there are no HTC stores, carriers don't have any spare parts and very few devices are shown, there are no official repair shops, the ONE hasn't arrived yet and there's no estimated date (it may never come but if it does it's price tag is expected to be around 900 bucks for the 32Gb device), support and advertisement are non existent, etc.

And this is not a purchasing power issue as the market is absolutely flooded with SGS 3 and 4 and iPhone 5's. As far as I've read it's almost the same all the way down to Argentina and Chile.

Peter Chow needs to be fired for not investing in one of the largest markets in the planet: Latin America.

I made a mistake when I went with the HTC HD7 and got burned when they didn't officially support WP7.8 but there were many other reasons too. I gave them a second chance with the brilliantly designed 8X (although I wanted the L920, it wasn't available on my carrier at the time). Unfortunately, HTC's strategy is to release new products at the most opportune time and then stop right there. The software support and innovation from HTC on WP is shameful but not surprising and I will never get another HTC device ever again.

I can't speak for Android, I think that's more of a marketing problem since Samsung have seemingly limitless resources to push the Galaxy range. The HTC One is excellently executed and they do add more value to it with Sense UI than without it, certainly more than on Windows Phone anyway. But they just don't have the clout to beat out Samsung.

They should take a leaf out of Nokia's book and start to innovate beyond classy bodyshells and good product launch timing. Nokia add value to your phone and continue to do so, long after you purchase it.

C'mon Nokia, do what every other OEM is doing and go full Android. Things will be so much better there... It will be like a dream come true!... OH WAIT!

Imagine if HTC switched to Windows Phone exclusively like Nokia. And imagine that the HTC One sold about the same amount as a Windows Phone exclusive. What would've been the effect? Windows Phone would've gained market share... thereby strengthening the platform and drawing more developers towards it. In short, Windows Phone's gain would also be Nokia's & HTC's gains as well. Sure, right now they'll be big fish in a small pond, but as the Windows Phone pond grows... so do those fish.

cybersaurusrex said,
And imagine that the HTC One sold about the same amount as a Windows Phone exclusive.

That's quite a lot to imagine.

cybersaurusrex said,
Imagine if HTC switched to Windows Phone exclusively like Nokia. And imagine that the HTC One sold about the same amount as a Windows Phone exclusive. What would've been the effect? Windows Phone would've gained market share... thereby strengthening the platform and drawing more developers towards it. In short, Windows Phone's gain would also be Nokia's & HTC's gains as well. Sure, right now they'll be big fish in a small pond, but as the Windows Phone pond grows... so do those fish.
Imagine a Lumia 920/1020 with Android vs a Samsung Galaxy S3 or 4...which one you think would sell better. I am willing to bet the Lumia would win. Which is why to claim Nokia would have failed with Android is pure speculation and nothing more.

HTC needs to improve marketing. The HTC One is an amazing phone but no one knows about it. Blink feed and Zoe are really nicely done software.

Exactly... HTC One could be an amazing phone as you are saying. Still it's not selling ? Why ? Because if I were to go for Android I'd go the Samsung way. That means putting Android on a phone is not magic. How is Sony doing with all its Android phonez btw ?

Deihmos said,
HTC needs to improve marketing. The HTC One is an amazing phone but no one knows about it. Blink feed and Zoe are really nicely done software.
Marketing isn't the problem. What is the problem is, IMO is HTC's reputation with device support. When it comes to Android, IMO; if My device comes with 4.x.x, then any Andoid update with the 4.x.x should be mine to. Hwoever, because a move from 4.0 to 4.1 is considered a NEW OS, then I do expect that when Google release updates like 4.1.1, 4.1.2, 4.1.3 my device should get them as they are the same family and this doesn't happen with HTC. I know phone makers arent going to support a device more than 2 years. But they should. If I sign a 2 year deal than any OS that comes within my contract period, I should get no mater what numnbetr it is as long as my device can use it. The problem is the carriers and hen the OEM's arent helping either as they aren't fighting for us.

Out of all the OEM's, HTC has the worse support.

The other issue is devices. IMO the best HTC device I ever bought running Android was the Incredible. I had the thunderbolt, it sucked. I checked out the Evo 4G which was also rather good and I checked others especially the HTC One. If the One has came to VZW I would have bought it. Exclusivity deals ****ed me off with HTC.

With Samsung with the Galaxy S, every carriers gets on even if it is named different. There should be no deals. Because without phones the carriers have no business. And if the OEM's wouldn't charge so much for devices, I would always buy direct. Why pay HTC $799 for the HTC One, when I can get it from the carrier for $650.

After the issues with the One series, the waste of money for Beats Audio (which I like Beats Audio) lack luster phones, lack luster features, Samsung is winning simply because they are the only ones playing to win. HTC isnt playing to win, they are just playing. In 2009 HTC kicked butt. They need to go back and understand how they kicked but then and do it again.

Oh really ? As if we didn't know that. Yes HTC makes Windows Phones (or else, they pretend to) and compared to Nokia... they SUCK big time. Look at the HTC 8S and look at the low end Nokias. They trump it. Now look at HTC 8X and look at Nokia 925/928/1020. Enough said.

C#Rocks said,
Oh really ? As if we didn't know that. Yes HTC makes Windows Phones (or else, they pretend to) and compared to Nokia... they SUCK big time. Look at the HTC 8S and look at the low end Nokias. They trump it. Now look at HTC 8X and look at Nokia 925/928/1020. Enough said.

I was proving a point that the OS is not the cause of their problems. Thanks for the extra fluff in your commend and missing the point.

techbeck said,

I was proving a point that the OS is not the cause of their problems. Thanks for the extra fluff in your commend and missing the point.

In Nokias case I would say the OS is the problem. Here is why. When Nokia sold only Symbian devices, they were selling over 100M phones per year for a few years running. If they had replace Symbian with Android which works similar, feels similar they would have s=did well with it. For anyone to claim they would have beat Samsung is BS. Samsung wasn't at the top of Android phones ta the beginning, HTC was. With the EVO 4G and the Droid Incredible which combined beat APple for 3 quarters of 2009.

They messed up with the One Series and with the Beats Audio deal.
Nokia lost more than half its based by using Windows. Why? Windows requires licensing which makes the phones more expensive. Nokia will never be able to sell a Windows Phone for as low as an Android phone can be sold and that is simply fact. EVen Blackberries are cheaper vs Windows. Why? Bec you don't have to buy a license, you simply buy the phone.

In markets where Nokia was king like Asian markets, they acnt afford the high cost of an iPhone or Windows Phone. How the heck do these guys think selling a phone that most of your basedcant afford is smart.

Yea its smart to go from selling 100M phones per year to less than 15M...yea...real smart. Nokia is only having success with Windows Phone because no one else wants to make an sell one thus Nokia is basically the only option.

When Windows Mobile was King, HTC was the largest producer and make of Windows Mobile devices. They should have continued the trend and made nice Windows Phones too. The 8x is very nice, but sure its no Lumia. But I don't give a crap about a gimmicky camera. I want other features I actually use.

Samsung is the lead OEM for lost of reasons, removable batts, sdcard support, faster hardware, bigger screens, stylus support, NFC support and more. The others aren't doing all that and they are suffering. Also none of them wree sued by Apple on the same level. Maybe bec of that many people who hate Apple is helping Samsung get up higher to teach Apple a lesson. There are many factor that people aren't considering.

But to say if Nokia went Android would have been a failure? Well lets compare. Would you as a person or anyone want the following...

And HTC One running Android or a Lumia 920/1020 With Android
Would you prefer a Galaxy S3/4 running Android or a Lumia 920/1020 running Android

I can say with ALL HONESTY, if I had an iPhone right now, I would choose a Lumia 9xx/10xx running Android over a GS3 or 4 but not the Note II bec I have a Note 2 and there isn't a phone sold today that tops it in any way.

Every phone I ever over before an iPhone almost, had a stylus which I was a Windows Mobile loving fan. The note 2 is perfect in size, perfect in features and perfect in price for what it offers. No other phone meets that.

TechieXP said,
In Nokias case I would say the OS is the problem.

I am not talking about Nokia. This topic is about HTC.

Thanks for the info tho....

neonspark said,
clearly nokia should have done android phones because it is working GREAT for HTC

HTC's financial woes have nothing to do with Android, it's their management and inability to properly deliver truly competitive handsets. They keep flooding the market with senseless devices running outdated software while they don't even roll out decent updates for devices released months ago. The HTC Sense framework is still bloated and looks horribly outdated compared to others.

neonspark said,
clearly nokia should have done android phones

Sarcasm aside, many people actually agree with you.

I know, I have an 8x collecting dust under my desk. But I played with an Android One, and let me tell you, I'd drop my iPhone 5 in a heartbeat for one of those running Windows Phone 8.x.

Nokia is selling more windows phones than HTC is selling phones period for the last 2 quarters. So much for going with android equals instant success.

vcfan said,
Nokia is selling more windows phones than HTC is selling phones period for the last 2 quarters.

I honestly doubt that... got a link to back up?

vcfan said,
Nokia is selling more windows phones than HTC is selling phones period for the last 2 quarters. So much for going with android equals instant success.

While I don't think Nokia should go fully Android...Android IS NOT HTCs problem. Its they management, not supporting their devices, and basically the way the company is run. This all started with the mass influx of devices they were releasing.

vcfan said,
Nokia is selling more windows phones than HTC is selling phones period for the last 2 quarters. So much for going with android equals instant success.

exactly, nokia is on the road to black and HTC is about to dip on the red. so much for the "android = self driven money machine" argument many made and proves nokia was right: Samsung is android and nobody else can really compete. Google has a real problem in their hands since Samsung now calls the shots.

i know it isn't their problem,im just saying people saying going with android equals instant success are wrong,as evidence by how HTC is currently doing vs how many windows phones nokia are selling. I agree that OS alone doesn't mean everything.

neonspark said,

exactly, nokia is on the road to black and HTC is about to dip on the red. so much for the "android = self driven money machine" argument many made and proves nokia was right: Samsung is android and nobody else can really compete. Google has a real problem in their hands since Samsung now calls the shots.

yep,and nokia has a chance to leapfrog all the other android manufacturers as well and become a top 5 smartphone vendor again next quarter,if they continue at their pace of their windows phone sales growth.

neonspark said,

exactly, nokia is on the road to black and HTC is about to dip on the red. so much for the "android = self driven money machine"

Again, Android is not HTCs problem. Never has been and they make WP products as well. The company needs to clean house and get people that know what hey are doing.

techbeck said,

While I don't think Nokia should go fully Android...Android IS NOT HTCs problem. Its they management, not supporting their devices, and basically the way the company is run. This all started with the mass influx of devices they were releasing.


That is simply false. For one Nokia makes better phones that HTC. I mean compare for yourself. If an HTC One with Android was avail or a Lumia 920 or 1020 with Android, which one would you buy?

Fact is, since Nokia has Symbian, they would have done well with Android bec they would have been able to keep the phones cheap and in the same markets. Nokia lost 50% of it base when they too Windows Phone and didn't even port many of it services to it. At leats with Android, Google services would have been great alternatives people could use until Nokia ported its own stuff over.

The landscape would have been, Nokia would have been given Samsung good competition and in fact you have no idea who would have been on top. To say Nokia did right is simply false. You have no idea how they would have did.

I'd say since Android is very similar to Symbian, in Asian markets at least they would have still had a nice choice to replace instead of having to learn Windows Phone which doesn't work anything like their old device nor does it have the same services.

Nokai went from selling 100M Symbian phones per year to selling about 10M Windows Phones. Yeah that's real smart. HTC isn't selling phones bec no one wants them bec HTC offers such poor support, same for Moto.

Samsung is selling more phones because efor the same price they give you more. The other could do the same. You either compete on the same level or you will lose. Fact Is HTC and Moto don't have the money to compete with Samsung which is why they cant win.

Its not Samsung's fault.

TechieXP said,

That is simply false. For one Nokia makes better phones that HTC. I mean compare for yourself. If an HTC One with Android was avail or a Lumia 920 or 1020 with Android, which one would you buy?

What are you going off about for? I didnt say anything about the quality of Nokia's builds or whether or not they would of done well with Android. I simply said I dont think Nokia should of went fully android and that Android is not HTCs problem. You took this in a different direction and commenting on things I did not comment on.

And HTC used to be on top and doing better than Samsung with Android. It is their lack of support and saturation of different models that caused their problem. (which I stated originally) They lost consumer confidence and it would be hard to get that back, if at all. And Motorola Mobility, now owned by Google, has the ability to compete if things are done right.

Edited by techbeck, Jul 30 2013, 7:09pm :

vacs said,

I honestly doubt that... got a link to back up?

sure, q1 2013, htc sold 5.36million total phones(android+wp),nokia sold 5.6million wp (gartner and idc reports)

http://www.chinapost.com.tw/ta...5/19/378971/HTC-remains.htm

q2 2013,htc profits up 40% from previous quarter,remember,this also doesn't translate to 40% more phones sold,since htc one is a high margin device,but for ha ha's,lets translate it that way,that equals 7.5 million. nokia sold 7.4 million windows phones.remember htc also sells windows phones,so no matter what,nokia sold more windows phones than htc sold android phones 2nd quarter.

http://allaboutwindowsphone.co..._2013_show_increased_sa.php

HTC's failure is proving Nokia was right to go with Windows Phone. Whoever thinks Android OS is the ultimate solution for all mobile problems/lack of sales has been proven wrong.

People want brands they can trust with continued customer support. Apple is one of them. Nokia comes close.

C#Rocks said,
HTC's failure is proving Nokia was right to go with Windows Phone. Whoever thinks Android OS is the ultimate solution for all mobile problems/lack of sales has been proven wrong.

People want brands they can trust with continued customer support. Apple is one of them. Nokia comes close.

That is a ridiculous statement. Nokia is not doing so hot either. HTC makes Windows phones too, but their Android phones probably sell more than the WP. I think at this point, a company has to be invested in both Android and WP. Make the devices similar in terms of hardware to cut down on R&D, and run different software on it. If HTC doesn't want to support their Android lineup with updates, just ditch Sense and give it the Play edition treatment - less resources (I can only wish on the last part)

C#Rocks said,
HTC's failure is proving Nokia was right to go with Windows Phone. Whoever thinks Android OS is the ultimate solution for all mobile problems/lack of sales has been proven wrong.

People want brands they can trust with continued customer support. Apple is one of them. Nokia comes close.

HTC's trouble has little to do with their choice of OS.

They release wave upon wave of new phone, most of which receive only a few months worth of OS updates. They insist on putting Sense on top of their Android phones, which makes their phones look outdated, and causes them to under-perform and drink battery. The quality of their hardware has plummeted since the golden age of the Desire (my One X has been back in for repair more than my previous 4 phones combined).

The above mostly translates to their Windows Phone offerings too. Their 8X series of phones compete with Nokia, but they can't compete on a hardware quality level.

Majesticmerc said,

HTC's trouble has little to do with their choice of OS.

They release wave upon wave of new phone, most of which receive only a few months worth of OS updates. They insist on putting Sense on top of their Android phones, which makes their phones look outdated, and causes them to under-perform and drink battery. The quality of their hardware has plummeted since the golden age of the Desire (my One X has been back in for repair more than my previous 4 phones combined).

The above mostly translates to their Windows Phone offerings too. Their 8X series of phones compete with Nokia, but they can't compete on a hardware quality level.

The HTC One from a hardware/design perspective is amongst the top in the market now. The device is NOT slow out of the box, and battery life is excellent out of the box. Whether or not Sense looks outdated is subjective. I find it visually more appealing than any other Android skin, and modern. They definitely need to work on their update strategy (or lack thereof)

tsupersonic said,
The HTC One from a hardware/design perspective is amongst the top in the market now. The device is NOT slow out of the box, and battery life is excellent out of the box. Whether or not Sense looks outdated is subjective. I find it visually more appealing than any other Android skin, and modern. They definitely need to work on their update strategy (or lack thereof)

It is all about marketing. It has nothing to do with Sense, the masses don't even know what that is. Sense is a lot better than the stock Android where you can't even sync your contacts photos from FB. . Have you seen touchwiz? It looks cartoony if you ask me but it outsells the competition because of marketing. It has nothing to do with updates either because here in the USA samsung is slow at updates. The masses do not care about updates.

Again.. it's Samsung that is making the phones sell, not Android. The managed to get a strong brand name with Samsung Galaxy series and the stuck to it. Anyone knew of Samsung in the mobile world before Samsung Galaxy came about ?

tsupersonic said,
The HTC One from a hardware/design perspective is amongst the top in the market now. The device is NOT slow out of the box, and battery life is excellent out of the box. Whether or not Sense looks outdated is subjective. I find it visually more appealing than any other Android skin, and modern. They definitely need to work on their update strategy (or lack thereof)

Well that's great news for you, but where does that leave the rest of us? What about the HTC One S owners that stopped receiving updates after 9 months? What about the HTC Legend 2 years ago that got about 6 months of software updates? What about us One X owners that were promised we wouldn't be left behind after the One was released, and haven't seen an update in months? What about the 2 years between the Desire and the One where Sense was the most bloated launcher on the market?

The reason HTC are doing badly isn't because of how bad their current phone is, it's because of how bad their previous phones were. People I know that had the Sensation and Desire HD have mostly jumped ship to the Galaxy S4 and Xperia range.

I'm not making the battery stuff up either. Check out the reviews...

http://www.techradar.com/revie...ows-phone-8x-1098439/review
http://www.neowin.net/news/rev...-one-phone-to-rule-them-all
http://www.techradar.com/revie...htc-sensation-943466/review
http://www.t3.com/reviews/htc-desire-hd-review

That's two years of garbage battery life from HTC. At some point you'd have thought they'd have seen the light, but then maybe they didn't have enough battery.

The fact is, HTC are hurting not because of their current product range, but because of their previous product range. The companies mismanagement, coupled with falling build quality and poor support for the two years leading up to the One have caught up with them because people are jumping ship to other phones. I really hope that the One turns their fortunes around, and I really hope they learn their lesson, because I like HTC products. But unless they do learn from their catastrophic decline, there's not much we can do for them except watch them run themselves into the ground.

C#Rocks said,
HTC's failure is proving Nokia was right to go with Windows Phone. Whoever thinks Android OS is the ultimate solution for all mobile problems/lack of sales has been proven wrong.

People want brands they can trust with continued customer support. Apple is one of them. Nokia comes close.

That is simply false. For one Nokia makes better phones that HTC. I mean compare for yourself. If an HTC One with Android was avail or a Lumia 920 or 1020 with Android, which one would you buy?

Fact is, since Nokia has Symbian, they would have done well with Android bec they would have been able to keep the phones cheap and in the same markets. Nokia lost 50% of it base when they too Windows Phone and didn't even port many of it services to it. At leats with Android, Google services would have been great alternatives people could use until Nokia ported its own stuff over.

The landscape would have been, Nokia would have been given Samsung good competition and in fact you have no idea who would have been on top. To say Nokia did right is simply false. You have no idea how they would have did.

I'd say since Android is very similar to Symbian, in Asian markets at least they would have still had a nice choice to replace instead of having to learn Windows Phone which doesn't work anything like their old device nor does it have the same services.

Deihmos said,
DO you know the US carriers call the shots when it comes to updates?

Its different when a manufacturer of the phone you have specifically chooses to not support the relatively new phone, then announce it.
http://www.neowin.net/news/htc...-barely-a-year-after-launch

That has nothing to do with the cell providers. They may muck with the timing of updates (for their own Q/A, and timed for congestion per network), but they would never 'stop' them, that just wouldn't make sense.

I realise I am only one customer among millions, but I personally would never buy an HTC again. I had to send my HD back for repair due to a faulty volume switch. When it came back the screen was full of scratches (screen protector had been removed for some reason). When I complained they said I was lying. Not very good customer service!

The HTC Sense ROM is dreadful (wish all android phones would be stock google roms) and they are slow at rolling out updates.

I know google are pushing for 'Google Editions' but it seems quite limited outside the USA.

To be successful in todays market, I think they need to do what Samsung and Nokia are doing, focus on one OS and build a solid eco system around one product. They don't seem to be doing so much with Windows Phone now that the One is out. If they were to focus on the One and build the mini as well as a tablet around that I think that would help

Imagine if HTC switched to Windows Phone exclusively like Nokia. And imagine that the HTC One sold about the same amount as a Windows Phone exclusive. What would've been the effect? Windows Phone would've gained market share... thereby strengthening the platform and drawing more developers towards it. In short, Windows Phone's gain would also be Nokia's & HTC's gains as well. Sure, right now they'll be big fish in a small pond, but as the Windows Phone pond grows... so do those fish.

They need to keep supporting the old devices for at least a couple years. Get their priorities straight and people will trust them again.