HTC is on a downward spiral with 68 percent decline in sales
First to launch a 4G phone but won't be a 5G leaderBy Greg Synek 14 comments
Recap: HTC once was a highly competitive smartphone maker but has since had trouble making sales. Falling to dangerously low levels of production, the company risks running into further problems as profits fall.
HTC was one of the original smartphone makers leading the charge into 4G LTE adoption and produced a few phones competing for top ratings. All that happened circa 2011 when the HTC Thunderbolt was running Android 2.2 and the iPhone 4S debuted without LTE support, although the HTC Evo was the first 4G smartphone in 2010.
Now, HTC isn't in such a favorable position. Sales are down over 68 percent in June marking the largest decline in over two years. Increased competition from Chinese manufacturers and the struggle to compete with the likes of Samsung and Google is taking a toll. Although Apple was a competitor to HTC several years ago, consumers considering HTC devices probably are not looking too closely at iPhones anymore.
Throughout June, HTC managed only $72 million in sales. According to an analyst from Trendforce, the Taiwanese smartphone maker has had lower sales than expected in the high-end segment and only mediocre sales figures in the middle- and low-end categories due to a lack of improved hardware. Rival Samsung excels in the mid-range and lower cost segments with dozens of different smartphones available worldwide at practically every price point.
Last week, HTC announced layoffs of over 1,500 employees from its manufacturing facilities. This year, total production volume is expected to be less than 2 million units. Considering that rivals sell more than that on a single launch day, times are quite bleak for HTC. Year to date, HTC stock prices have plummeted nearly 30 percent.
Although it is possible to operate as a small niche smartphone maker, there are many challenges to doing so. Mainly, low volume production costs become a problem. For HTC, there will be many downsizing pains for the foreseeable future.