HTC sees weak Christmas ahead, blames iPhone and product transition for its troubles

On first look, HTC has just delivered another stellar quarter of performance.

Their smartphone shipments grew 93% from last year, 9% from the last quarter, and reached 13.2 million units. Overall revenue jumped 79%, while it’s profits increased 68%. Pretty impressive.

But if we take a closer look, the numbers HTC reported today are pretty worrying.

First – HTC missed the guidance it gave during the last quarterly report. Back in July HTC management told us that they plan to sell 13.5 million smartphones in Q3. But actually sold 300K less then that. Usually HTC used to give a conservative guidance, that it was able to easily beat. The fact that they were not able to do it this time is not good.

Then we have HTC’s forecasts  for  Q4 2011 sales. From 12 to 13 million units to be sold in October- December. Which means that during the strongest quarter of the year, with Holiday Shopping Season in full swing, HTC now plans to sell less smartphones then they sold during Q3.

When asked about the weak Christmas quarter,  HTC CFO Winston Yung blamed competitive environment and product transition, especially in the U.S.

According to Yung – competitors are launching a lot of strong new products in Q4 which will negatively affect HTC sales. He singled out iPhone specifically as a problem. This year, for the first time ever, iPhone launched in Q4 instead of mid-summer.  To make matters worse for HTC – this time new iPhone is available on all three major U.S. carriers, and shipped 16 months after the previous model – so there is a huge pent up demand for it.

Meanwhile, HTC is caught up in a product transition in the U.S. and has not yet launched major H2 2011 product updates. And its HTC Sensation flagship is selling below expectations too. In HTC’s words – “While Sensation is doing well, but compared to competitors – it could have done better. Sensation has not fully lived up to our expectations”.

But not is all gloom and doom at HTC yet. During the conference call they promised two major product launches in the U.S. next month. Both of those are likely to be LTE smartphones.

And HTC management sounded pretty upbeat and confident about their Q1 and full 2012 prospects. According to Winston Yung, HTC is already doing very well in China and also has a very strong portfolio of LTE devices for the U.S. for next year.

Let’s hope Yung knows what he is talking about, this H2 2011 hiccup is just a short term blip, and HTC will resume its wild growth next year.


Author: Stasys Bielinis

While I like to play with the latest gadgets, I am even more interested in broad technology trends. With mobile now taking over the world - following the latest technology news, looking for insights, sharing and discussing them with passionate audience - it's hard to imagine a better place for me to be. You can find me on Twitter as @UVStaska'

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  • Nokia

    That is not fair to blame iPhone for the sales failure of HTC. I am totally with iPhone and I like iPhone phones very much.