HTC posts operating loss for 4Q13

Taiwanese handset maker HTC has announced an unaudited operating loss of NT$1.56bn (US$51.9m) and net profit after tax of NT$0.31bn for 4Q13, missing analyst expectations. The firm’s total revenues reached NT$42.89bn during the quarter.

In the same quarter of 2012, HTC recorded NT$60bn revenue, while net profit stood at NT$1bn.

The performance ends a difficult year for the firm which posted its first ever quarterly loss three months earlier. The firm made a net loss before tax of NT$2.97bn ($100m) for 3Q13, when revenue stood at NT$47.05bn.

In May 2013, research firm Gartner reported that HTC shipped 5.36 million handsets in 1Q13, which took it down to 11th place in the global smartphone market, with a 2.5 per cent share.

In September 2013, the vendor also announced plans to reduce its US workforce as it looks to “streamline and optimise” its operations in the country.

Tony Cripps, senior analyst at research firm Ovum said that HTC is providing an interesting case study in what it takes in order to succeed in the handset space.

“A lot of HTC devices have been very highly rated by reviewers so it is not immediately clear how a company with a reputation for producing such high quality devices is in this kind of financial trouble,” he said.

“The most obvious truth this shows is that scale and marketing budget are now all important. It also shows how HTC and other such companies are disadvantaged by being pure handset players. A lot of consumer electronics firms today are more diversified and also produce tablets, PCs, screens and wearable devices as well as smartphones.”

Cripps said HTC is also struggling to gain traction with operators and the important channel they control.

“There’s a lot of competition for handset manufacturers to be included in carriers’ six-monthly update cycles – there are a lot of manufacturers now offering smartphones. HTC is not carrying the same influence among carriers as the likes of Samsung appear to,” he added.