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Stiff competition and failure to launch stronger products could be to blame for the drastic drop in HTC’s quarter-four profits. The newly released figures... HTC 2012 Profits Drop

Stiff competition and failure to launch stronger products could be to blame for the drastic drop in HTC’s quarter-four profits.

The newly released figures from the end of 2012 revealed a 91 per cent dip in net profit year-on year.

The unaudited consolidated results from Asia’s second-largest smartphone maker shows that net profit, from October-December, fell to $1 billion New Taiwan (NT) dollars ($34.4 million), from NT$10.9 billion the previous year.

It was also the fourth quarter in a row that HTC profits have fallen sharply and is the lowest since 2004.

The company, which is listed on the Taiwan Stock Exchange, made NT$60 billion (US$2.06 billion) of consolidated revenue in the fourth quarter of last year.

Rival brands

The year-on-year decline may imply the Taiwan-based company is struggling to keep up with the likes of rivals Apple and Samsung, which have profited from the release of the iPhone 5 and Galaxy models.

Analysts have also suggested that the firm suffered poor profits after failing to launch any big products throughout the period.

HTC first started selling mobile phones under its own brand in 2006 and in 2010 was the biggest vendor of Android devices in the U.S.

Looking ahead

Despite the ailing results, last week HTC chief executive Peter Chou, told The Wall Street Journal that ‘the worst for HTC has probably passed’, that more needed to be done to promote products and that 2013 would not be ‘too bad’.

“Our competitors were too strong and very resourceful, pouring lots of money into marketing. We haven’t done enough on the marketing front,” Chou said.

There is growing speculation around the launch of an HTC flagship M7 smartphone, complete with Sense 5.0 software in the coming months, although exact specifications have not officially been confirmed.

Could the impending M7 turn things around for HTC in 2013?

[Image via Tabletolic]