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HTC Expectations: Not a Good Q3 ?

HTC has only just recently managed to stabilize itself as it has been experiencing a major wave of bad luck. They managed to gain some ground in certain areas, but lose profit it others. While this may seem as normal behavior, for a few months they stagnated it the failure part of previously mentioned situation. Personally, I found that to be a real shame as I had a great degree of respect and admiration for HTC products. Now, analysts aren’t predicting good things in their future and grim times may be ahead once more.

There has been some growing disagreement between certain analysts upon how HTC will perform in Q3. Wall Street was looking at a lfat growth quarter on quarter, where as the Australian firm known as Macquarie Securities predicted a 15-20% drop in sales due to lower HTC One demand ( which, may I remind you, was their main money-maker ). As the unfortunate nature would have it, the Australians were closer to the mark than anyone, but even they did not hit it 100%. HTC themselves have come out with a statement that revenues in Q3 will be as much as 30% lower than those of the previous quarter.

Q2 has been wonderful for HTC and it started off pretty well. The third month, however, a decrease in revenues was noticed compared to the same quarter of the previous year. As it would have it, Q2 of 2012 made 4.1 billion dollars, where as Q2 of 2013 made only 2.36 billion dollars. Now, HTC is expecting somewhere around 1.7 to 2 billion dollars in Q3 of 2013. Compared to the predictions of circa 22 analysts ( which was around 2.53 billion ) and those of last year ( 2.35 billion in Q3 of 2012 ), things seem to indeed have gone down the hill again.

HTC keeps saying that they are expecting some fierce competition in the high-end phone market ( the market in which the HTC One happens to be ) and also in the mid-range market ( where they had the HTC One Mini ), fact which will undoubtedly harm the company’s sales. The profit margins will also be much smaller. The company put this in its statement:

“Our overall gross margin has been impacted by a relatively higher cost structure, lack of economy of scale and certain provisions needed to facilitate the clearance of aging products.”

I guess time will have to pass for us to know the real truth behind this all, but things aren’t looking too good for HTC.

About Alexandru Becheru

He is a technology enthusiast and experienced writer.

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