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HTC struggling as profits drop 70 per cent

Taiwanese handset maker crosses fingers for One series

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HTC’s fortunes took another turn for the worse on Friday after the Taiwanese handset giant revealed that first quarter net profits dipped a massive 70 per cent from the same period last year, as the firm continues to struggle against the likes of Samsung and Apple.

Profits stood at NT$4.5 billion (£95m) for the first three months of the year, while revenues went down 35 per cent year-on-year to NT$68bn (£1.4bn).

The writing was on the wall for HTC after the firm missed analyst estimates with a glum Q1 2012 forecast in February predicting revenue of between NT$65bn and NT$70bn (£1.4-£1.5bn).

Analysts have put HTC’s demise down to its inability to carve out a decisive brand identity and differentiate from the multitude of rivals all selling Android handsets.

Consumer confusion over its many product lines also put it at a disadvantage in the huge Chinese smartphone market, where brand identity matters even more because up to 70 per cent of handsets are sold carrier independent.

The firm will be looking to draw a line under its latest disappointing financials and hoping to reinvigorate its smartphone business after the launch of the One series.

This Tegra 3 based range, announced at Mobile World Congress, has been pretty well received so far and could yet turn the Taiwanese firm’s fortunes around by proving a hit with consumers.

In an increasingly crowded marketplace, Samsung and Apple are the two firms which represent the biggest challenge to HTC getting back on track, according to analyst firm Gartner.

“HTC’s real challenges are Samsung’s next flagship Galaxy and Apple’s next iPhone, which we still have to wait and see,” analyst CK Lu told The Reg. ®

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