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Not even the world’s best Android phone could save HTC in May

Published Jun 3rd, 2014 2:15PM EDT
HTC Earnings
Image: Zach Epstein, BGR

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HTC has faced many setbacks, disasters and bitter disappointments since its handset unit performance started missing projections around Christmas 2011. But May 2014 might have been the most devastating blow yet. That is because HTC had supposedly reacted to miserable sales declines in 2012 and 2013 by revamping its handset design and marketing strategies. Both the product and how it is sold were changed to finally staunch the bleeding by spring of 2014.

Yet despite the new product and branding initiatives, May 2014 turns out to be a chilling omen of a summer of horror for the besieged Taiwanese vendor.

After delivering nearly 13% year on year revenue growth in April, HTC faced a sudden reversal of fortune as sales plunged by 27% in May 2014 compared to the same month a year earlier. This means HTC actually delivered a 4.5% sequential sales decline, even though May is usually a far stronger month than April for handset vendors.

What makes the May swoon look particularly nasty is the fact that the annual sales decline of May 2014 is actually deeper than it was during the springs of May 2012 and May 2013. HTC’s phone revenue has tanked far below its 2011 levels over the past three years — yet the company is now suffering from a steeper spring sales decline than ever before.

What makes this such a tragedy is the fact that HTC has one of the best-reviewed flagship models out right now. The brand new One (M8) received stellar reviews after it debuted a short while ago.

Many believe the M8 is the best model HTC has ever released. This spring was supposed to mark HTC’s triumphant comeback as a top-tier challenger to Samsung. It now seems that it may just be another botched product launch.

Inventory issues stemming from troubled production ramp-up have been discussed as one possible explanation. It is possible that HTC may be able to increase production for summer — but missing the key spring sales season is simply unforgivable considering how pivotal the M8 rollout was for the company.

After launching mobile game company SpringToys tragically early in 2000, Tero Kuittinen spent eight years doing equity research at firms including Alliance Capital and Opstock. He is currently an analyst and VP of North American sales at mobile diagnostics and expense management Alekstra, and has contributed to, Forbes and Business 2.0 Magazine in addition to BGR.