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HTC Sales Falls 49%, $345M In Losses After One M9 Problems

HTC Sales Falls 49%, $345M In Losses After One M9 Problems

In the first half of 2015 sales have fallen 57.7% the profit fall follows four quarters of slight net profits.

The Taiwanese Company has been hit by plummeting smartphone sales and valuation losses after production lines that were ramped up for the new One M9 were left idle.

HTC has announced a strategic shift to sell more mid-priced phones in emerging markets as opposed to more expensive ones in markets like Australia.

They have also moved to strip manufacturing costs.

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In the second quarter, its revenue totalled NT$33.01 billion, almost half the NT$65.06 billion it fetched in the second quarter of 2014.

 HTC doesn’t disclose its shipment number, but the company has said it has closed some of its production facilities as sales have dropped and as it has outsourced some of its manufacturing. 

The Wall Street Journal said that HTC was a top Android smartphone maker a few years ago, but its return to losses indicates how second-tier smartphone makers are struggling in a maturing market.

Low-cost smartphone makers, such as Xiaomi who does not operate in the Australian market because it is “too small” according to their Chinese executives, are grabbing emerging-market share quickly at a time when global smartphone shipment growth, particularly toward the high-end is slowing.

Despite praise for the sleek design of HTC’s flagship device for this year, the One M9, some analysts were sceptical, citing the phone’s incremental hardware upgrade from its One M8 last year.

HTC’s shares in Taipei sank to a record low of NT$71.10 on June 30, compared with an all-time high of NT$1,300.00 in April 2011. 

Chairwoman Cher Wang, who returned to day-to-day operations last year and has also been doubling as chief executive since late March, has said the company “is moving beyond the smartphone business.” It has recently launched a fitness band and a virtual reality device in overseas markets but not in Australia where the Company is trying to set up a sales network of retailers.