HTC reports 83 percent drop in second-quarter profit

Taiwan smartphone maker HTC has reported an 83 percent drop in second quarter profit today, after being hit by intensifying competition in the smartphone market. HTC’s profit totaled 1.2 billion New Taiwan dollars ($40 million) on revenue of NT$70 billion in the three months through June.

The company predicted revenue to drop to between NT$50 billion and NT$60 billion in the third quarter as high-end smartphone sales appear to have reached their peak. HTC became the first maker of smartphones based on Google’s Android software in 2008 and its sales then surged. But they began a sharp decline in the second half of 2011.The company recently went on record to say that the company is planning to capture 15 percent of the smartphone market in the next few years. But immense competition as well as internal problems may prevent HTC from doing so.

HTC reported an 83 percent drop in profit due to fierce competition

The company had hoped to win back some of its market with the launch of the “HTC One” series of phones, which offer users a better camera and music experience. The company earlier announced that it reportedly shipped five million HTC One’s within the first month of release. The company could still not match the figures that Samsung pulled in, though. The current flagship of the South Korean phone manufacturer, the Samsung Galaxy S4, shipped 10 million handsets within a month of its launch.

Recently, HTC has launched a market push for mid-range smartphone models, an area in which is expected to face stiff competition from China’s ZTE and Huawei. Rivals Apple and South Korea’s Samsung have felt similar pressure as the high-end handset boom gives way to growing demand for mid-range models.

Associated Press