Business | Technology

HTC losing smartphone battle

Apple patent deal reached earlier with HTC fails to help drive revenues

  • The Guardian
  • Published: 13:21 December 9, 2012
  • Gulf News

Taipei: Revenues at the Taiwanese handset maker HTC has fallen year-on-year for the 13th month in a row, continuing a downward trend in its growth that began as far back as March 2011 but has accelerated in the past year.

Figures posted on the company’s investor site show that for November, revenues were NT$21,230 million ($729 million). That is down 31 per cent on the figure a year ago |— though it is an improvement month-on-month.

The company does not offer monthly profit figures, but its profitability has been slipping along with its revenues. In the third quarter, to the end of September, it made an operating income of just NT$4.9million ($168,000), down by 80 per cent from the year before, as revenues fell by 50 per cent. With revenues for the fourth quarter likely to fall too, HTC may veer on the edge of profitablity — though the company has not so far issued a profit warning.

HTC is struggling to make headway in the phone market after briefly being the biggest smartphone seller in the US in 2010. In the Android market, it has come up against increasingly fierce competition at all price points from South Korea’s Samsung. Meanwhile, its newest range of HTC 8S Windows Phone handsets — a lower-end challenger — will not go on sale in the US because of “testing delays”, it said last week. Instead it will only be selling top-end HTC 8X Windows Phone device in the US.

HTC’s fortunes may ease in the coming months after it settled a long-running series of court battles with Apple over patents, in which the two sides signed an agreement to share some — but by no means all — of their intellectual property. The deal will be the focus of a court battle on December 6 between Apple and Samsung, during post-trial hearings after Apple was awarded $1 billion in damages by a California jury against Samsung, which was found guilty of infringing a number of Apple’s design and utility patents.

The HTC-Apple deal relates to utility patents, and Samsung is arguing that the iPhone maker’s willingness to license some patents to HTC means that it should not be granted an injunction against Samsung devices claimed to infringe the same patents.

Meanwhile, data from ComScore shows that HTC has rapidly been losing share in the US market, the world’s richest — though not biggest by volume — for smartphones. Its figures for phone ownership in the US in October show that fewer people are using HTC phones: from a peak of just under 15 million in use in January 2012, the number now has fallen to just over 14 million.

By contrast, the number of Samsung phones — both smartphones and featurephones — in use in the US has risen during that period from 59.4 million to 61.5 million, while iPhone use has risen from just under 30 million to 41.6 million, according to ComScore’s data. Together the two companies are now the most-used phone brands in the US, ComScore says.

— Guardian News and Media Ltd

Gulf News
Quick Access

  1. Markets

  2. Economy

  3. Property

  4. Aviation

Business Top Stories

  1. Up for sale: Dh4,045m for a Gherkin

  2. Full steam ahead for the Gulf’s rail network

  3. Barclays net falls as investment income sags

  4. Russians’ alarm grows over Putin tactics

  5. Australia rules out new sanctions