HTC Profit Fall by 50 Percentages

It seems like another smartphone giant is going to join Research In Motion’s death spiral. Last week, stepbystep published a news about RIM’s upcoming product Blackberry 10, which has been delayed due to the company’s crumbling financial situation that has eventually led the company to cut 5,000 jobs.

HTC stood first in making an Android phone and became a major brand in the U.S. and other markets. But due to Apple and Samsung’s monopoly in the smartphone market, both HTC and RIM are struggling to survive in the industry. According to ABI Research, Samsung and Apple took in 90 percent of profits generated from the overall global smartphone sales in the first quarter of 2012.

Looking at the sales figures of the first quarter of 2011, HTC shipped 9 million phones whereas Samsung stood at 11 million. However, a year later, the company suffered because of substandard models and patent-infringement lawsuits by Apple, which eventually declined its sales to just 6.8 million handsets while Samsung was selling 44 million.

HTC revealed its recent sales figures of its second quarter earning on Friday, showing a real blow to the company. The profit went down to $247 million on sales of $3 billion – a decrease of 58 percent compared to the previous years. On the other hand, its archrival Samsung announced quarterly operating profit of $5.89 billion, which is a 79 percent increase following the previous quarter in 2011.

According to a research, HTC ranked at 5^th position in the U.S. with 6 percent of the market. Chief Executive of HTC, Peter Chou is confident that the company’s decision of last year to acquire Beats Electronics – a headphone maker company – will help HTC distinguish itself from Samsung and Apple. Earlier this week, Beats announced the buyout of MOG, an online music service. Peter Chou said that “Focusing on music will allow HTC to offer a unique and differentiated and awesome experience. We see an opportunity that we can do something on Smartphones to make the music experience so unique, differentiated and awesome and create an emotional connection with users.”

It will be interesting to see if HTC is able to achieve its target; and whether or not they will give a tough time to Apple and Samsung remains to be seen.