HTC post disappointing results: 79% profit drop

HTC are struggling in face of rising competition, posting their lowest quarterly profit results since 2006. The company has been suffering in the face of rising competition from Apple and Samsung in the smartphone sector. Their third quarter profit was $133 million.

HTC was the biggest smartphone maker by shipments in 2010, using Googles operating system. Their profit has been dropping steadily since the fourth quarter of last year as Samsung hit them hard. Samsung have overtaken HTC to become the biggest vendor of Android devices in America in 2011.

Samsung on the other hand are experiencing rising sales and their Galaxy S III has been one of the best selling smartphones in the world. They are expected to post more record quarterly operating profit results for the third quarter.

HTC have dropped to fourth place in the smartphone sector in the second quarter of 2012 with a global market share of 5.7%, a drop from 10.7% a year earlier. This is based on research from IDC.

Market leader Samsung now have a market share of 32.6% in the second quarter with Apple holding 16.9% and Nokia 6.6%.

HTC's forecast doesn't look any better, as analysts claim the company will continue to struggle against Samsung and Apple products.

HTC are focusing on Windows 8 smartphones, hoping that end of year sales will help them boost profit margins. Analysts claim that Windows 8 may not help however as it is a relatively weak ‘ecosystem' with support for only 100,000 applications. Android and Apple have 600,000 and 800,000 respectively.

The WSJ add “Though HTC and Microsoft executives have touted the user-friendly simplicity of the smartphones, Microsoft's operating system represents a tiny sliver of the world-wide mobile-device market. Its market share was just 2.7% at the end of the second quarter, according to research firm Gartner Inc., far below Android's 64.1% and the 18.8% for Apple's iOS.”

Kitguru says: A tough forecast ahead for HTC. Lets hope they can ride the storm out and increase sales in 2013.

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