HTC stops growing. Slashes revenue forecast by a 25%

Few weeks ago we told you about our concerns with HTC Christmas quarter outlook. It seems that our worries were spot on, and Taiwanese company situation is even worse then expected.

According to Bloomberg, HTC issued a profit warning today, telling investors that they expect Q4 2011 revenue to be around NT$104 billion (~ $3.5B). That’s about 25% below NT$125-135B HTC was expecting to earn only 3 weeks ago. And it’s about the same amount HTC brought in during Christmas quarter last year. Which means that the explosive HTC growth people got used to during the last few years, has come to a screeching halt.

We do not know yet how this drop in revenues translates to the decline in HTC device shipment volumes. But since we haven’t heard anything about widespread HTC handset price cuts, somewhat similar decline can be expected. Which means that during Q4 2011, HTC will now ship somewhere between 9 and 10 million handsets. Losing market share, and #4 spot in smartphone maker rankings to RIM.

HTC was right to worry about the impact iPhone 4S launch will have on its sales in U.S. That impact was even worse then they expected, and the newly launched Verizon Rezound and AT&T Vivid LTE devices didn’t help much.

If the lackluster interest in the new LTE handsets was indeed the reason for the revenue drop, that doesn’t bode well for HTC plans for 2012. During Oct. 31st earnings conference call company management was very optimistic about next year’s outlook. But that optimism was based on 2 pillars – very rapid growth in China, and a very strong LTE device portfolio in U.S.

If HTC overestimated the quality or demand for its LTE handsets, we might be in for even more unpleasant surprises in January.


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'

Share This Post On