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Ouch! HTC’s profits are in freefall

We all knew HTC was having a rough time financially, but the company’s latest earnings report reveals just how grim the situation really is.

HTC’s revenue for the first quarter of 2016 is down 64% compared to the same period last year – it turned over around £315 million. Worse still, HTC revealed that its first-quarter profits have fallen by 78% year-on-year.

The Taiwanese technology giant struggled to sell HTC One M9 handsets last year after the tepidly-received phone failed to compete with big flagships like the iPhone 6S, the Samsung Galaxy S6, and the LG G4. What’s more, the company was pouring money into its HTC Vive virtual reality headset, which has only recently gone on sale.

But the outlook isn’t so bad for HTC, for the rest of 2016 anyway. HTC is now (finally) selling HTC Vive headsets, so the company should be able to cash in on the VR explosion. What’s more, the company’s recently announced HTC 10 smartphone is faring well with critics, and looks likely to perform better than last year’s HTC One M9.

HTC 10Here’s the HTC 10, HTC’s flagship smartphone for 2016

“The media and consumer buzz around HTC, including for the keenly-awaited launches of the flagship smartphone and Vive virtual reality system, clearly demonstrate our leadership in innovation and have provided a great boost to the HTC brand,” said Cher Wang, HTC’s CEO, in a statement.

Speaking to the BBC, analyst Ben Wood, of CCS Insight, said: “The next quarter will be critical because we’ll start to see the effect of Vive and the HTC 10 phone. The company has really got to work ahrd to show signs of progress. The combination of Apple’s incredible success and Samsung’ determination to outspend all its rivals on marketing puts HTC in a precarious position.”

Related: Best Android Smartphones 2016

Watch our HTC Vive unboxing:

Do you think HTC will turn around its fortunes with the Vive and the HTC 10? Let us know in the comments.

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