Jan 06 AT 9:53 AM Nick Gray 38 Comments

HTC hits a brick wall – revenue and profits decline in Q4 of 2011

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HTC’s growth streak has come to an end. HTC has released its unaudited results for Q4 of 2011, revealing that the company’s revenue stream was down 2.49% from the same quarter last year. Total revenues for the quarter reached NT$101,419 million while net income after tax was NT$11,017 million, a 25% decline from the previous year.

The decline in total revenue was certainly not a surprise to investors since HTC revised its earnings projections for the quarter in late Q3 which was then followed by a 20% drop in year-over-year earnings in November. While HTC may no longer be breaking any of its own sales records, the company’s outlook is anything but bleak. HTC is projecting to report NT$465,795 million in revenues for 2011 which is 40% higher than 2010’s numbers.

While HTC’s profits are certainly not as impressive as Samsung’s, we suspect this little hiccup for the fourth quarter of 2011 is directly related to its handset release cycle which had a very impressive showing in 2010 when the T-Mobile G2, HTC Desire HD and Desire Z launched across the globe. We’re not sure what HTC has planned for CES, but let’s hope it’s enough for the company to post some positive numbers for the first quarter of 2012.

What do you think HTC needs to do be successful in Q1 of this year?

Via: Engadget

Source: HTC

Nick is a tech enthusiast who has a soft spot for HTC and its devices. He started HTCsource.com (the first HTC blog) back in 2007 and later joined the Android and Me family in the summer of 2010.

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  • James Woods

    Its hard to say what they need to do. They make some really nice hardware, even if it has become quite repetitive.

    I reckon they need to tone down the HTC Sense experience… Or at least make it possible to disable it. Sense used to be essential for a great Android experience… now, not so much.

    • ben dover

      They need something that stands out. all their flagship phones look like an evo or the dinc from 2010.

    • _Diego

      I completely agree with you. They make very good devices; they have a robust feel, very good build quality…

      I’d be sold in an instant for a HTC with the option to disable Sense. I want something new to look at :-) I’m afraid that this will not be the case though… ICS could give them a push however, with the new and sleek design.

  • Ted

    They need to ditch sense.. IMHO it was never needed, I was a OG droid user and am now on a Droid Inc2 (with CM7 not with sense). The hardware is pretty good, sense not so much.

    Perhaps they don’t need so many models with all the R&D that has to eat into profits somewhere.

    Differentiation in the Android space will be tough but HTC could really maximize their built in widgets, top line audio (beatz) and try some other innovations that build onto android not cover it up.

    • Dre

      I agree. While Sense is a nice UI, It’s too heavy and intrusive. At least optimize it to run smoother. Or Or drop it all together, adopt Vanilla (Android 4.0) and add only certain features of its UI

    • http://htcsource.com Nick Gray

      I think it’s funny that people hate HTC Sense even though HTC used Sense to introduce many of the features which are now standard in Android. I do agree the the UI is looking very dated and should get a complete overhaul with Android 4.0

      Here’s a quick list of things that Sense had BEFORE anyone else:
      Flash support, text reflow in the browser, pinch to zoom, animated widgets, advanced camera options, advanced unlock screen, facebook contact integration, and much more.

      After two full years, the core of Android has finally caught up to HTC Sense, but that’s no reason for HTC to stop pushing other improvements.

      • David

        Please bring the features. Please stop mandatory UI layers.

        Simple.

        It all boils down to companies fooling themselves into thinking that those skins provide any value in the mind of the user. In my opinion, Sense was good back then, hence the HTC success. But today, users don’t see the value in that.

        Therefore, it’s a waste of R&D money and man-hours that would be better spent elsewhere, in stuff that users actually do care about, thus providing *real*, perceptible value (in the mind of the users, which is what matters anyway).

        There is a huge cost that is going to the kitchen sink. Cost that users couldn’t care less. So, it’s waste.

        • http://htcsource.com Nick Gray

          I’d have to disagree. While Android geeks like us don’t see much value in a custom layer on Android since we all have our favorite apps that we like to swap out to change things up, the general public has a much different perception of them.

          I have family members and friends who keep buying the same brand of Android because of the UI. I have friends who love Sense, Motoblur and touchWiz because that’s what Android is to them. Take it away and they are lost.

          I’ve rooted phones for friends and installed CM and most of them wanted me to change things back to a Sense or TouchWiz custom ROM even though their phone was faster and less buggy. OEM’s have done a good job at creating a branded feel for their custom versions of Android which brings return customers over the long run.

          • http://droidsamurai.blogspot.com DroidSamurai

            I agree with you, to a certain degree. I think OEM does have the right to customize their phones, but they also need to do a better job in optimizing their UI. Just look at Samsung, the TouchWiz UI looks horrible, but it runs a lot smoother than Sense. In addition, the OEM doesn’t have to change the look or the UI to provide additional features. They can keep the stock UI, and add features through their own apps.

          • Ironzey Lewis

            I agree 100%. Going from stock Gingerbread to Sense I was surprised at how it didn’t suck as bad as all the reviewer said it would. I still prefer stock Android but Sense doesn’t really suck as bad as the reviewers would have you believe.

            I will say that it is a time for a refresh. As a fan of Sense I was REALLY disapointed to see the leak of Sence with ICS. The same lockring, the same icons everything seemed the same as Gingerbread. What’s the point in upgrading if it’s going to look and act the same as the old stuff.

            Hell, Sense 3.5 (or whatever they are putting on the Rhyme) seems like more of an upgrade.

            I geuss they need to maintian a balancing act between consistent user expirience and upgrades. So far it seems consistantcy is winning, that’s probably what most (non enthusisiast) people prefer.

          • http://htcsource.com Nick Gray

            @ironzey keep in mind that the “leak” that we posted was not an official ROM from HTC. It was the creation of a ROM developer which used Android 4.0 as a base and added Sense 3.5 on top of it. HTC is expected to debut Sense 4.0 with Android 4.0 which should bring a substantial UI overhaul.

          • David

            Let me elaborate more on what I said. Late, I know, but better late than never.

            I said explicitly “_mandatory_ UI layers”. That’s the main point here. And I stand to what I’ve said: that’s not a value, it’s a disadvantage and a waste of resources that instead of achieving lock-in, in the long run it probably will keep more potential users at bay than those loyal to those UI features. And I’m not even considering the value of geeks and early-adopters into branding.

            Case in point: I bought a GSM Galaxy Nexus a few days ago. I don’t know how to install custom ROMs (but I could if I needed — I’m familiar with adb and flashing concepts and problems in general), but all the well known reasons made me go with the GNex. Hardware-wise, I could probably go with the Razr or something else if I wanted. But no, because I’d had to deal with UI layers that I don’t want… let alone the limitations of the devices (locked stuff etc.) which is something that doesn’t apply to the majority of users. But UI changes do apply to them.

            And even removing the “mandatory” from the equation, it’s not like I don’t think it’s ineffective (you just proved that it is), it’s that it I’m guessing it’s shortsighted.

            In my opinion (granted, not much), custom UIs should go into the Market. We can’t really test the real, _sustained_ value until that value is tested and proved. And how we can test? I don’t think we can reliably.

            That raises: how long can they go until the common user learns about the disadvantages of having UI layers (I’m assuming that they genuinely delay updates, at a minimum, at a maximum it’s also a lame excuse). So, my question is: how long is that? Note that at the best it’s also applied even to (future) non-mandatory UI layers.

            The most I could see is the value provided by a bundle (assuming those UIs are useful and not just a lock-in made by differentiation for the worse). But that is open to debate as if that’s truly the best strategy business-wise.

            But of course, I don’t know much. I’m just a customer. Perhaps a better-than-average, educated one. But still not into this business.

          • David

            Ah, and by the way… to sum it all: I think that sometime… maybe now, maybe later, choice fueled by open, fair competition wins over lock-in. The time frame is another story.

      • Richard Yarrell

        Your 100% correct. I applaud htc they have done android very and have done the same for windows mobile so they have nothing to be ashamed of. Meanwhile stock android or ics is simply a better feel and experience and i would know i rolled with htc my last 3 device. Credit must be given to google and the hard work they have done in ics its sinply special with a touch of sense and i love it. For me it’s stock forever..Htc helped me to learn everything regarding android sense was truly helpful in that sense. Today that’s no longer needed plain and simple

  • amgala

    They still made 40% more revenue for the year than 2010, I’d say that’s pretty good.

  • Rafael Vatury

    Well its true that its not impressive as Samsung profits, but I assume 40% is pretty good.

    I’d say HTC have to improve their software aka Sense UI cause their hardware is great.

    Plus, the company isnt that popular much as Samsung in Europe….I’m just saying maybe its their problem.

  • bellken

    If HTC wants to differentiate itself, successfully updating all of their 2011 released phones to ICS in the 1st quarter would be quite a feat. (i.e. demonstrating support to their existing customers)

  • virexed

    All thanks to Samsung and its Galaxy line.

  • Nathan D.

    well it had to happen at some point right?

  • AA

    1. I have two HTC phones and one tablet which are great devices. But their GPS performance is not as good as my Motorola’s that locks almost instantly and always stays locked.

    2. While HTC’s speed to update the OS is okay, it could still be much faster if they lay off on the heavy customization. (Also their skin conflicts with some market widgets.) I would much rather prefer the phone with the latest OS that would get updated fast over the one with the fastest processor but with old OS.

    3. Don’t release too many models and give up on them too soon. Release only top end phones with distict features and keep supporting them. You want a happy customer when when it is time to renew his/her contract.

    These will make me a me a loyal customer without hesitation.

    • http://htcsource.com Nick Gray

      If you look at Europe, you’ll notice that HTC only has a few phones per year. It’s the U.S. carrier who are ordering custom phones for their “4G” networks and HTC simply gives in to the pressure since it’s a guaranteed order for them.

      HTC simply needs to put its foot down and tell U.S. carriers that they will get the same phones that the rest of the world is going to get. having fewer phones should free us time for their software engineers to work faster on getting newer version of Android rolled out to their current phones.

  • drop

    HTC has been stuck with Qualcomm chips for too long, I think.

    Creating innovative phones is certainly harder when you rely on the same (somewhat old) CPU as half the smartphone market.

  • h0ruza

    Samsung makes a profit. HTC makes losses.

    Remember the HD2? I have a friend with this phone running miui 2.2.1 and I put if up against my Galaxy S2 and it stkll looked good after three years. The current line doesn’t move me one way or the other and hats there problem.

    They need to de-clutter there design inside and out, hatdware and software and they will bounce back just fine.

    Less is more.

  • xray49er

    As a person who in the last 5 or six years have only owned htc phones. There phones are becoming repetetive. They are investing in the wrong place. Who cares about beats audio when none of there phones are going to be quickly updated to ics. Sense is useless now when android is mature enough to do what sense first did when i had my g1 and was envious of the hero. Also maybe riding so hard with qualcomm and snapdragon is biting them in the ass. everytime i want to download the new hotness i get device incompatible on the market. Now i am looking into getting a the galaxy nexus and i am really not a fan of samsung due to them not updating there phones, but with it being a nexus i know it will be updated. Hopefully htc will have some ics devices minus sense at ces and maybe i will get another htc handset.

  • Nate B.

    This was seen coming from a long way. Repetitive hardware. Its not mind blowing but its nice. So many of the same devices and Sense is honestly becoming unattractive and cluttered. Thats why they said 2012 will be more so on quality. They knew already.

  • danielmkim

    As a HTC thunderbolt owner, it’s irritating how long it takes for an OS update. Gingerbread came late October, 2011.

  • Ironzey Lewis

    I think if they want to turn a profit they should:

    Be THE manufacturer that supports hackers and customizers.

    They took a setep in the right direction with the bootloader unlocking tool. From here on out they should allow users to to the same with all devices going forward.

    Even though they are not the blessed Nexus maker they should put out at least one Pure Android Device. The last Nexus I had was the Nexus One. It was a great phone that looked good and preformed well. Even though they can’t use the Nexus name they can put somehting out that embodies the same spirit. Unfortunatly for HTC I’ll eventually get a Galaxy Nexus or maybe I’ll start saving for the next Nexus phone.

    Another thing they can do is tablets. One low end the other high end and make sure the perform well.

  • CTown

    HTC’s phones were so boring this year. The only interesting thing they did this whole year is putting that HD screen on the Rezound, and perhaps the MyTouch 4G Slide (with it’s nice camera and all). Everything else was essentially the same as last year.

  • redraider133

    I think they need to lighten up sense like how moto and samsung lightened up their UI so it doesn’t take up so many resources and cause even the high spec’d phones to stutter and lag.

  • DroidPower

    I think they need to win Google over so they can make Google’s next “Nexus” phone, though the next Nexus probably won’t come in Q1 2012. I liked the Rezound idea. Maybe they should focus more on that–target people who like beats audio (music people and younger audience) and come out with more devices that have beats built in. Or, have a totally different factor that will differentiate them… Or get Apple to sue them so they can get publicity

  • aykutb

    your looks is %90 before you start talking. same with everything, htc devices lacked material quality and design in my opinion.also throwing big parties gets you popular only for a week or so, making funny commercials stay in one’s mind longer.

  • Andy_jr

    I’m not familiar with NT$. What are those numbers in something we’ve heard of? ;^)

  • http://www.jimtravis.com jimtravis

    Always liked HTC phones since WM, and Nexus One. HTC Flyer is my favorite 7″ tablet. Overall, I like Sense. There are more pluses than minuses for me, so overall it is a positive experience. Would like to see a master control panel which allows user to turn on / off each enhancement along with a master Sense Off switch.

  • nk

    Still a fan of android and more importantly htc however HTC’s downturn was well anticipated. Too many models with less support for existing models. None of my phone accesories are working normally now after 1 year of use which shows a lapse in quality control.the phone that was purchased last year has become an antique piece now with too many models rolled out after. Hope HTC understands this and concentrates more on quality than quantity .

  • sylar

    Ouch well they do still sell quite a few phone so I’m sure that they will come back.

  • Melissa

    I love HTC and I can’t seem to buy another device, if anything it would be Samsung.

  • FB Stalker

    Hey HTC, why don’t you release a device that doesn’t have half-baked software for once (like my Sensation) and maybe it will perform like it should.

  • Leo

    they need to get acquired by lenovo so all shareholders can cash out