HTC makes costs leaner, foresees a fruitful quarter

6.11.2014 Magdalena Gauci


For the second quarter back to back, the phone manufacturer HTC has managed to turn a profit even as smartphone sales decline.



After a long line of losses, HTC has declared its second quarter in a row to be profitable. The mobile device maker did the same thing to make both quarters fruitful: Cutting costs when smartphone sales started to slow. This means that HTC can be comfortable for a few quarters yet, but for a long term approach, cutting costs can only get you so far.



HTC posted an unaudited clear quarterly profit of NT$640 million (US $2.000.000) which is a drastic turnaround from the year ago period when the company lost a whopping NT$3 billion and this figure beat analyst expectations of NT$216.23 million in a beautifully sound manner for HTC but revenue is down 13 percent this year so cost cutting can’t cover everything, they also need to boost sales.



Their flagship device, The HTC One M8 had a better than average reception from consumers when it was released in April as a competitive device to the Samsung Galaxy S5. Sales are slowing down now , even though we are currently in a time when the market for smartphones is steadily growing. HTC is under immense pressure in this quarter as Apple has released the new iPhone 6 and 6 Plus handsets. These devices have already sold 10 million units in their first week after hitting the market. 10 million units in a week is nothing to laugh at, HTC sold 27 million handsets in the whole of 2013 between its entire smartphone portfolio, of which they released many models.


 



A tablet could be what’s key to boost HTC sales. Google has approached HTC to manufacture the latest Nexus tablet, the Nexus 9. And even though the tablet markets are all but covered by Samsung, iPad and to a lesser extent Microsoft’s Surface range – having Google’s name on the device could give HTC the revenue boost it truly needs.


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