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HTC says struggles will continue in Q3; forecasts 23% drop in sales, thinning margins

Struggling smartphone vendor HTC (2498) said on Friday that its business will continue to decline in the third quarter this year. The company last month reported a massive drop in profit and revenue during the second quarter, and alongside its now-audited Q2 results, HTC has forecast further decline in the third quarter. Revenue this quarter is seen falling 23% compared to the same period in 2011, and both gross margin and operating margin are seen thinning to 25% and 7%, respectively. In the second quarter, the vendor managed a gross margin of 27% and an operating margin of 9%. HTC saw huge success with its Android smartphones in 2011, reporting six consecutive months of record revenue. The company’s hot streak came to a screeching halt in October, however, as Apple’s (AAPL) new iPhone 4S burst onto the scene and competition from Samsung (005930) heated up.

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Zach Epstein

Zach Epstein has worked in and around ICT for more than 15 years, first in marketing and business development with two private telcos, then as a writer and editor covering business news, consumer electronics and telecommunications. Zach’s work has been quoted by countless top news publications in the US and around the world. He was also recently named one of the world's top-10 “power mobile influencers” by Forbes, as well as one of Inc. Magazine's top-30 Internet of Things experts.

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