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HTC Banking On 10 To Lift Sales As Revenues Plunge 64%

HTC who are banking on their new 10 smart phone, to deliver improved revenues has reported a 64% fall in sales in the last quarter.

This is not uncommon for a smartphone Company rolling out a new product.

Revenue for the first quarter dropped 64% to US$456M. The net loss was 2.6bn Taiwanese dollars, compared with a profit the year before.

Now the Company is pinning hopes on its new HTC 10 phone to revive fortunes as well as its virtual reality headset Vive.

“The media and consumer buzz around HTC, including for the keenly-awaited launches of the flagship smartphone and Vive virtual reality system, clearly demonstrate our leadership in innovation and have provided a great boost to the HTC brand,” said Cher Wang, chairwoman and chief executive of HTC in a statement.

Chief financial officer Chialin Chang added the company was hoping that the smartphone business would break even in the third quarter.

The HTC 10, which comes with an “ultraselfie” front camera designed to reduce the risk of blurry shots, and the Vive headset were both only launched in April and so are not reflected in this current quarter.

The success of those two products will dictate the success of the company, said analyst Ben Wood from CCS Insight.

“The next quarter will be critical because we’ll start to see the effect of Vive and the HTC 10 phone. The company has really got to work hard to show signs of progress,” he said.

“The combination of Apple’s incredible success and Samsung’s determination to outspend all its rivals on marketing puts HTC in a precarious position.”

Five years ago, HTC was the world’s fourth bestselling smartphone maker with a market share of about 9%.

But in 2015, it fell to 17th place with a share of about 1%, according to research firm IDC.
Wang said in a statement on Aug. 13 last year that the phone maker seeks to cut its staff of more than 15,000 by about 15 percent.

She said the layoffs are part of HTC’s plan to lower expenses by 35 percent and focus more on high-end phones and other hardware, such as the cameras and VR equipment.

In an internal e-mail reviewed by Bloomberg and confirmed by the company, Wang said the plan “will deliver HTC to a world leading position in each of our chosen businesses.” She added: “Be assured that I have full confidence that HTC will prosper again.”

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