Mobile

HTC’s Q4 profit tanks on dismal device sales

HTC President Jason Mackenzie and Verizon Wireless CMO Tami Erwin

Last week, HTC CEO Peter Chou said his company had seen the worst of its struggles. After taking a look at HTC’s fourth quarter 2012 results, we can only hope he’s right.

HTC reported a net profit of $34.4 million during the quarter — a steep 91 percent drop from the same period last year and the company’s lowest level since 2006.

Sales were similarly bad. HTC’s revenues dropped 41 percent to $2.69 billion, signaling its biggest, most pressing issue: People really aren’t interested in buying its phones.

As we pointed out last week, this isn’t a fault of the phones themselves but of HTC’s inability to market them. And HTC knows it. “Our competitors were too strong and very resourceful, pouring in lots of money into marketing. We haven’t done enough on the marketing front,” Chou told The Wall Street Journal on Friday.

Chou’s comments were, of course, a clear warning to investors that HTC’s earnings would be pretty bad this time around. And while Chou is confident that 2013 will be a better year for the Taiwanese company, so far there isn’t much evidence to support that — at least from the sales and marketshare standpoint.

One thing that HTC does have going for it, however, is its patent deal with Apple. Shipments of its One X and Evo 4G LTE were delayed last year over suspected patent infringement, which certainly didn’t help sales of the devices. HTC’s deal with Apple ensures that a similar delay won’t happen again.

“HTC is pleased to have resolved its dispute with Apple, so HTC can focus on innovation instead of litigation,” said Peter Chou about the deal in November.

Maybe it’s innovation that will help turn HTC around in 2013.


Mobile developer or publisher? VentureBeat is studying mobile marketing automation. Fill out our 5-minute survey, and we'll share the data with you.