HTC Corporation is currently cutting their operating costs by almost a quarter in order to stave off bad results. But their new device, HTC One max smart phone, is not capturing the buyer’s interest.
HTC has had a tough year: first, facing some supply problems for the HTC One and then, lackluster demand for the HTC One mini and HTC One max. According to the Bloomberg, the company's most recent posted forward-looking earnings statement suggests that revenues of up to NT $45 billion for their fourth quarter, NT$7 billion short of Bloomberg analysts' NT$52 billion projection.
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To make up for this shortfall, HTC is going to limit their operating expenses, although this is not very clear where these savings will be made. This will also introduce newer, cheaper smart phones to appeal to a broader audience, but it will not make an attempt at what HTC’s current CFO Chang Chailin called the "ultra low-end" market.
As well as entering the competitive mid to low-end phone race, HTC is now considering outsourcing production of their devices if it is financially advantageous to do so. HTC Corporation owns factories in both Taiwan and China, and in late October, the company has denied a Reuters report that suggested that HTC would sell these production lines, and some of which have allegedly been sitting unused since August.
HTC's profits will also get boosted by the finalized sale of its stake in Beats Electronics, the company which is behind the popular Beats portable audio devices. HTC Corporation originally had a 50.1 per cent share of Beats Inc. they bought for US$300 million in the year 2001, but the headphone and Speaker Company bought half of that back last year for just US$150 million and has recently completed the purchase of the second half for US$165 million.
With this recent hardship for HTC Corporation, it is unlikely that we will see a direct successor to their flagship HTC One anytime soon.