The smartphone market has demonstrated that it can be very unforgiving to companies that fail to improve for a period as short as a year. The most recent example is HTC, the Taiwanese manufacturer well known for its innovative smartphones that are popular for their premium hardware design and the company’s proprietary UI, Sense. HTC was among the first manufacturers to make Android powered phones and in the early part of 2011, it was rated as the fastest growing company in the industry. However, stiff competition from Apple and Samsung has led the company’s sales to shrink and drastically lowered investor confidence.
Last week, HTC released its financial figures for the second quarter of 2012 and they were met with groans and disappointment by investors and stakeholders across the world. The company said that its second quarter earnings dropped by a whopping 27% and its forecasts for the future are in fact even worse. It predicts that the revenue would drop by half in the ongoing period and said that the third quarter revenue will be around $2.3 billion, which is 41% less than in the same period last year.
This quarter’s results show the third consecutive drop in figures for the company which had announced a 30% drop in revenues in the first quarter of 2012. Investor confidence appears to be at an all time low as they seem to fear that there will be no place left for HTC in the market anymore. Shares of the company are being sold in hordes and it now trades at a mere NT$ 238.50 as opposed to the glory days when it was going for around NT$ 900. The company’s value fell by $1 billion among a selling frenzy and there doesn’t seem to be any solution anytime soon.
Recently, HTC announced the One series and though the phones are labeled as superphones considering their power and performance, and are among the best in the market right now according to experts, they are not able to compete with the sleek designs of the iPhone and Samsung’s wide range of devices. It appears that customers are going more by the brand rather than the actual device. HTC is foraying into the market with the Windows Phone OS on some devices and perhaps that will allow the company to regain some lost ground if it continues its tradition of innovation.