Poor HTC. The Taiwanese smartphone company released its dismal Q4 2012 results this morning, chalking up $34 million in profit, a tiny fraction compared to the $2 Billion in revenue it earned Q4 2011. Mashable reports that HTC’s share of the US smartphone market shrunk from 10.3% at this time last year to 4% today.
A few thoughts on HTC’s tumble:
1. The smartphone market, like the HDTV market, is competitive to the point of being unprofitable. Only Apple, Samsung and, marginally, LG booked smartphone-derived profits in 2012. It makes one wonder at which point it becomes sensible for firms to pack up and go home.
2. HTC, like Apple, follows a relatively “premium” approach. Though its product lineup is not exactly like the “one phone for all” model of Cupertino, the company concentrates on a handful of high-end smartphones – often dubbed “super phones” – that chase would-be iPhone owners. This is an interesting contrast to Samsung’s “shotgun” method of production. As detailed in a previous post, this broader method just might be the way to go for any company that isn’t Apple.
3. In terms of US market share, HTC is now down to Windows Phone (1%) and Blackberry (1.6%) territory. And yet, the former represents a sliver of an OS, and the latter, entire OSes unto themselves.
4. Only one year ago, HTC was flying high, and used its cash – questionably – to take a $300 million majority stake in Beats, the headphone company. This was a poor move as the company effectively paid nine digits for the rights to an audio-boosting algorithm and the rights to a stylized “b” logo. But hey, there was some sorta street cred there. Right?
5. Samsung broadly outgunned HTC in the marketing sector, and it shows.