updated 06:52 am EDT, Thu May 2, 2013
HTC profit nosedives, but expects One-led turnaround for Q2
HTC has announced a Q1 profit of just $2.8 million for the months of January, February and March. This marks a year-over-year profit decline of a monumental 98 percent compared to the same period last year. However, the figures don't include sales of its new flagship One handset, which it expects to will make a significant and positive impact on its Q2 figures.
The Taiwanese company forecasts a big jump in revenue for the next quarter on the back of the sales of the HTC One, which is set to be further bolstered by the impending launch of its midrange handset, carrying the 'M4' codename. HTC expects revenue for Q2 to increase from its Q1 gross revenue of $1.45 billion to $2.4 billion. If its prediction is accurate, it will mark a turnaround of 63.6 percent in earnings, giving some comfort to shareholders.
However, to help engineer the turnaround, the company is trimming its profit margin on devices down to a mere 1 to 3 percent. Depending on market, the HTC One is retailing for up at least $100, or more, less than the its most significant competition in the Samsung Galaxy S4. The two devices are closely matched in terms of their hardware specifications; however, the HTC One has a display with a higher pixel density than the Galaxy S4 and features a more upmarket aluminum design.