Taiwanese smartphone OEM’s August sales data leaves very little doubt about that. Last month HTC’s revenues declined another 16%, to $NT 13.2 billion ($444M), from already dismal July, and are down 56% from May’s peak, the first month One started shipping.
Which means that while HTC may have gotten its carrier partners excited about their new flagship, that excitement was very short lived, because the end customer sales just weren’t there. With revenues falling so fast, there must be a lot of those Ones shipped in May, still sitting on retail shelves, unsold.
Which is a darn shame, because once again, there was nothing wrong with HTC’s flagship device. In fact, it probably was the best smartphone of the first half of 2013, with only one real competitor – Samsung Galaxy S4. But, just like last year, HTC’s poor brand recognition and lackluster marketing campaign transformed a clear winner into an also ran.
And things are not getting better anytime soon.
In fact we are probably looking at another HTC profit warning in a few weeks. They have sold $NT 29 billion worth of smartphones in August and July. To get to the lower end of the $NT50-60 billion guidance for Q3, HTC’s September revenues have to come in at at least $NT 21 billion. A 60% jump in monthly sales from August. Even in May, when One monthly sales peaked, HTC was able to grow monthly revenues only by 48%. What chance do they have to meet and exceed that number? With what?
HTC One mini? It has been shipping for most of August, and didn’t help at all. The new marketing campaign? They are focusing on long term branding with it, and a chance that it will significantly boost current product sales, just isn’t there. One on Verizon? The days when a single U.S. carrier could do that for HTC are long gone. Newly announced Desire 601 and 300? Those don’t start shipping until October.
And don’t forget the iPhone, which hits the markets in two or three weeks. And LG G2, which starts its worldwide rollout now, backed by a huge marketing campaign too. That’s just the things to spoil HTC’s lunch in September. In Q4 we’ll get Sony Xperia Z1, Galaxy Note 3 and a bunch of low and mid-end Samsungs to wreck havoc on HTC sales in the West, while the the upstarts like Xiaomi, Oppo, Meizu and established players like Lenovo, Huawei and ZTE put pressure on them in China.
Knowing what the competitors are bringing to market later this year, and what HTC has in its portfolio, things are looking very bleak for Taiwanese smartphone OEM. 2013 will be another lost year for HTC, and there’s nothing they can do about it now. Time to get back to the drawing board and prepare for the next year.
This time with a great flagship product again. But also with a new portfolio of cheaper devices at several price levels, launched in February or March, backed by a well thought out and financed marketing campaign, and the sales team that knows how to sell.
HTC still has something like $1.5B in cash, which should last them through the period of losses they are entering right now. But this is, most likely, HTC’s last chance. If Peter Chou is not able to turn his company around during the next product cycle, there will be no more HTC in 2015.