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HTC Posts Biggest Ever Quarterly Loss on Weak High End Demand

HTC Posts Biggest Ever Quarterly Loss on Weak High-End Demand

By Agence France-Presse | Updated: 6 August 2015 17:35 IST

Taiwan's struggling smartphone maker HTC suffered its biggest ever quarterly loss in the three months to June, as sales of its high-end products plunged, it announced Thursday.

The firm swung to a loss of TWD 8 billion (roughly Rs. 1,614 crores) in the second quarter from a net profit of $2.26 billion in the same period of 2014.

It is also a nosedive from the first quarter of this year, when HTC reported a net profit of TWD 360 million.

Revenues slid to TWD 33.0 billion.

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.

It said the outlook was dim for the third quarter with revenues forecast to fall to between TWD 19 billion and TWD 22 billion.

"HTC has begun to implement company-wide efficiency measures to reduce operating costs across the organisation and ensure resources are appropriately allocated to future growth," the statement said.

But analysts said it still faced huge challenges.

"In China there are around 10 brands which have come up with similar products for one-third of the price, not to mention giants like Apple and Samsung," Jeff Pu, analyst at Yuanta Securities Investment Consulting, told AFP.

Pu said he did not see an end to the downward trend.

"Like Nokia and Blackberry, few smartphone makers are able to turn around once they lose in the battle for marketshare. Consumers quickly forget you."

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

HTC said: "The company is working with over 1,000 developers on content creation over a wide spectrum of applications including gaming, entertainment and education, to ensure a compelling ecosystem ahead of the highly anticipated launch of HTC Vive at the end of the year."

Once the star of the intensely competitive smartphone sector, HTC has seen its fortunes collapse as Samsung, Apple and strong Chinese brands like Lenovo and Huawei have surged ahead.

HTC share prices have shed more than 50 percent this year, closing at TWD 70.0 Thursday.

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