HTC Profit Plunges, Sales of One Slow as Sector Stagnates

From DailyTech: Once the top smartphone seller in the U.S., Taiwan's HTC Corp. (TPE:2498) has today slipped to tenth place, according to Gartner, Inc. (IT). The company this week announced its earnings for June, revealing that it will miss analyst earning expectations despite modest sales of its well-reviewed flagship "One" smartphone. The struggles are the latest for the company, which has seen a dramatic financial fall from grace since late 2012.

The embarassing plunge could be blamed on a variety of causes:

- Poor management
- The general competiveness of the smarpthone market
- HTC's failure to gain ground in emerging markets like China
- U.S. slippage (due to import bans and being outmarketed by top U.S. sellers Apple, Inc. (AAPL) and Samsung Electronics Comp., Ltd. (KSC:005930)
- Margin-chopping license fees to Apple and Microsoft Corp. (MSFT)

HTC gave no hard numbers on how many One smartphones it has sold, only stating that sales are picking up. Previously, an unnamed executive had told The Wall Street Journal that by late May 5m One smartphones had been sold. That was roughly 2 months after the global launch, and 1 month after the U.S. launch (which was delayed to late April).

But Citigroup Inc. (C) Global Markets Inc analyst Kevin Chang estimates there may only have been ~1.2m in May sales and ~600,000 in April sales. He commented to The Taipei Times, "HTC shipments to peak in May, stay at a similar level in June and start to decline in July."

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