Things continue to go south for HTC, a brand famed for defining what luxury meant in the Android ecosystem, in its glory days. The Taiwanese smartphone maker has revealed financial reports for the fourth quarter of 2016, and the results are disappointing — again. [mks_pullquote align=”right” width=”300″ size=”24″ bg_color=”#dd3333″ txt_color=”#ffffff”]Net revenue for the fourth quarter of 2016 has suffered a 13 percent downfall to reach NT$22.2 billion ($720.7M).[/mks_pullquote]
While the figures appeared to be quite disappointing, a lesser year on year loss has been observed in comparison to last year. HTC suffered a loss of NT$4.1 billion ($133.1M) in Q4 of 2015 and has made slight improvements in Q4’16 with a loss of NT$3.6 billion ($116.8M). This could be fuelled by speculated bounce-back sort of launches in the coming up MWC.
Net revenue for the fourth quarter of 2016 has suffered a 13 percent downfall to reach NT$22.2 billion ($720.7M). Though these figures are depressing at the company’s end, the losses are still lesser than the figures of some recent quarters, which is somewhat comforting.
The gross margin has also suffered a decline on an year on year basis, falling from 13.9 percent in Q4 2015 to 10.5 percent in Q4 2016. However, HTC’s YOY operation margin was quite constant at -16.0 per cent for the quarter.
[mks_pullquote align=”left” width=”300″ size=”24″ bg_color=”#dd3333″ txt_color=”#ffffff”]The company also presented a 34 per cent cost reduction for the business over the year.[/mks_pullquote]HTC reports a “robust sales performance” for its fourth quarter and also points that there revenue is “improving sequentially over 2016”. We only wish we could share the company’s optimism, however, the figures appeared to be telling a story somewhat at variance from HTC’s tune. HTC’s revenue were almost stagnant in Q3 and Q4, which is actually the time when sales should have escalated because of holidays.The company also presented a 34 per cent cost reduction for the business over the year brandishing it an “aggressively managed” operating expenditure.
The VR push
Over the years, HTC has aligned towards building VR tech. However, looking at how the market already feels saturated due to lack of potential customers and mass penetration, this is already proving a risky bet for HTC. Undaunted though, the company hopes to capitalize upon its Vive range while also pushing further growth.
The fourth quarter did not just witness rigorous endorsement of HTC’s Vive VR play, but it also saw the release of several other mid-range handsets for its existing and established franchises like Desire and Evo. Absence of a good handset affected the revenues of fourth quarter.
HTC has also been the design and manufacturing partner for the new Google labeled ‘Pixel’ smartphones which were launched during the quarter. The alliance may bring some hike further hikes in HTC’s revenue.
The Q4 report also contains small details about company’s future plans, which is almost predictable considering company’s efforts of being an established name in the VR markrt.
The report says;
HTC continues to build the virtual reality ecosystem around HTC VIVE, with several events underlining the growing reach of the Vive platform, including opening the first VIVE-based arcade in Taipei, first demo days for VIVE X accelerator program in Beijing, Taipei, and San Francisco, and the launch of VIVE studios.
