HTC has recently reported its consolidated October revenues of $260 million, or NT$ 8.17 billion. In the year to date the company has reported total revenue just over $2 billion, or NT$ 64 billion. Compared with September, this represents a decline of 12.43% and compared with October 2015, a fall of 8.66%. This is a decline of almost 39% for the year to date. The company did, however, report an increase in gross margin and a narrowing of losses in the third quarter but industry experts believe the company’s prospects for the fourth quarter are “conservative,” believing that difficult or volatile market conditions could adversely impact sales and therefore profit.
As the world’s first Android smartphone manufacturer, HTC is still finding itself in a difficult position. HTC has released a family of devices and in recent years, these have included a flagship device from the “One” brand, which is followed by a number of mid-range devices under the “Desire” brand. The company has tried mixing things up in the last eighteen months; for 2015 it released the HTC One M9 as a flagship device and in the autumn, followed this up with the HTC One A9, a premium but mid-range device. Earlier in 2016 HTC released the HTC 10 and remixed the One A9 by dropping the specification but keeping the premium design. Unfortunately, HTC does not have the marketing clout of the bigger competitors such as Apple and Samsung, despite a product that is comparable in many respects, but charges a similarly high price as its bigger competitors. The company also struggles when it comes to software updates as it does not release monthly security patches, which can be blamed on being a smaller operation.
Looking forward, HTC has two positive things to consider. The first is the commercial success of its virtual reality headset, the HTC Vive. The HTC Vive has been used in a number of commercial operations such as amusement park rides as well as selling reasonably well. HTC are expecting Vive headset sales to pick up during the fourth quarter as consumers buy the device to give as a gift. Secondly, HTC is the device manufacturer behind the 2016 Google Pixel and Google Pixel XL devices, even though you will not see their branding on the device. Google is marketing and positioning these two new devices as competitors for the Apple iPhone 7 and these sales should help HTC’s wider business.