HTC’s profits hit rock bottom in the first quarter of 2013 as it failed to deliver the HTC One on time. Supply constraints caused HTC’s new flagship device to launch in scarce capacity, with there being only enough units to fill original pre-orders placed in the UK and other parts of Europe. That episode gave HTC its lowest profit ever as it raked in a paltry $2.8 million.
HTC enjoyed a long stretch where it was consistently placed on the other side of this convoluted rainbow — the side that had the pot with all the golden coins. For that reason, even though it didn’t lose any money it was still troubling that profits have dropped so sharply. Things look like they are set to improve, though, as financial firm JP Morgan Securities has upgraded HTC’s rating from being an “underweight” to being “neutral,” a move that has more than doubled its price to $11 from $5.35. Revenue is expected to rise more than 50% in Q2 compared to Q1.
JP Morgan’s valuation comes from the fact that HTC is finally beginning to reach optimal performance in manufacturing, with HTC One shipments in April set to exceed 1.2 million. That number is expected to increase to 2 million in May. Compare that to the 300,000 units HTC produced last quarter and you’ll see why things are starting to look up from here. Most North American carriers have been accepting presales for quite some time meaning there’s reason to believe HTC is finally producing enough units to go around to everyone.
The first North American launch is set to take place in just a few days, and regular shipment in markets where the device is already on sale should improve sales drastically. HTC is expected to show financial improvement in Q2 because of it, but there’s still reason to believe HTC won’t reach the same potential it could have if the HTC One were to launch on time. It gave its biggest competitor, Samsung, the chance to show off its 2013 flagship — the Samsung Galaxy S4 — and gave LG time to get the ball rolling on the LG Optimus G and LG Optimus G Pro.
Regardless, HTC’s new strategy for 2013 — a pointed marketing focus that limits the company to just two or three flagships instead of saturating the market — should help keep it from going rock bottom anytime soon. We pray for that it all goes according to plan for the sake of healthy competition. [via Focus Taiwan, thanks Android Creature!]