February 6, 2012 | by Andrew Kameka
HTC reported its Q4 2011 earnings today, and revenues predictably took a dip. The company lowered expectations weeks ago and said it would report lower revenues, but no one knew to what extent. After seeing very strong quarters in Q2 and Q3 of last year, HTC fell to $101.42 billion NT last quarter. That was almost as low as what the company reported in Q4 2010.
Despite the late year decline, HTC is betting heavy on the devices that it will unveil at the upcoming Mobile World Congress. The first quarter of this year will likely be even more disappointing, but HTC expressed optimism that its next wave of phones will reignite the popularity that it enjoyed in the early half of 2011.
“Despite temporary weakness resulting from product cycle transition, HTC believes it has the ability to create a new wave of momentum through the upcoming product cycle. These margins are a temporary phenomenon and will normalized when [the] product cycle transition is over.” – HTC earnings statement.
The reason that sales declined was because the company got caught with its pants down during the holiday sales season. Apple had a phenomenal quarter thanks to the iPhone 4S, Samsung kept momentum going on the Galaxy S II series, and Motorola had a number of phones to offer. Meanwhile, HTC didn’t have anything new to compete with those phones. In the next product cycle, HTC will seek to deliver phones good enough to return the company to prominence. HTC was once the preferred phone maker of choice in the Android sect, but the brand lost some of its luster.
“We dropped the ball,” CFO Winston Yung is quoted as saying during HTC’s earnings call. Hardware design didn’t appeal to customers, so the company is expected to introduce thinner phones with better battery life and stronger specs. The rumored HTC Ville will be a big start, but users are likely to see a couple more high-powered phones unveiled at MWC. HTC has said it will focus on the higher end of the smartphone market and release fewer phones this year, so expect the company to come out swinging in Barcelona.