Today they have released monthly sales figures for November 2011, and the numbers are terrible. Last month HTC earned 30.9 billion in Taiwan dollars, or 1,024B in US$. Which is an almost 20% drop from November 2010 sales, and a whopping 30% decline from just a month before.
And that’s with their AT&T Vivid and Verizon Rezound Holiday Season LTE flagships selling for a full month. Black Friday – the busiest shopping day of the year in U.S – behind us. In what historically is the best month for HTC sales.
Smartphone business these days is a hit driven affair. And HTC’s troubles show what happens if your hero device flops.
Having a full fledged handset portfolio, covering multiple price points, is important. But what makes or breaks you in the smartphone market today, is your top-tier/flagship device. Apple is an obvious example. Samsung has its big hit with Galaxy S line for two years in a row now. HTC had its hits with the Desire/Droid Incredible, and the original Sprint Evo last year.
But then their hero smartphone for 2011 – HTC Sensation – didn’t live up to the the promise. Company management admitted as much, and if you look at month-by-month numbers, HTC sales growth has stalled this June/July at NT$45B (US$1.5B). Right about when carrier customers where able to absorb initial Sensation shipments and gauge the future demand.
After that, while Samsung was reporting mind blowing Galaxy S2 sales, HTC numbers remained stalled at $1.5B a month, until late October. Then crashed, when the next generation iPhone arrived to all big U.S. carriers. And Verizon made Motorola Droid RAZR its main Android device for the Holiday Season, at the expense of all other vendors.
However, things might be bottoming out for HTC right about now. It is a bit too early to tell, but if HTC is able to meet the lowered forecasts they made during November 11th profit warning, December numbers will look a bit better. HTC said that they plan to earn NT$104 billion in Q4 2011. Two months in – they already have NT$75 billion in the bank. Which leaves NT$29B worth of smartphones to be sold in December. While that number is still 6% MoM and 13% YoY decline, it is nowhere near as bad as what happened in November.
In the end, it will all depend on what HTC will deliver next year. We all know that they can make some very good smartphones. Also, HTC managers are going around and telling everyone what a great portfolio they have for 2012.
Let’s hope they do, and that they figured out what went wrong with Sensation strategy this year. Because it’s always painful to watch the underdog your rooted for, fail.