Smartphone makers HTC and Samsung
shared lower-than-expected projections of their quarterly sales and
revenue Friday, raising concerns that the smartphone firms aren’t able
to deliver the kind of growth that has helped them prosper in recent
years.
HTC reported a net income of nearly $42 million,
below expectations of around $66 million — and down 83 percent from
the same period last year, despite glowing reviews for its HTC One
smartphone. Meanwhile, Samsung actually offered its strongest-ever second quarter guidance,
with expected sales of about $50 billion and a projected operating
revenue of $8.1 billion to $8.3 billion. But that fell below analyst
expectations, which Reuters reported were for around $8.8 billion in revenue.
The two companies are in very different positions in the smartphone
world, with Samsung on top of the market while HTC is struggling to stay
in the game at all. But both are facing an issue that plagues the wider
market — sales are slowing across the smartphone market and companies
can’t keep up with sky-high expectations based on the growth of past
years.
Thursday’s results were particularly gloomy for HTC — the
first to make phones running Google’s Android operating system — which
has been slipping fast in the smartphone market. According to IDC, it
was the fourth-largest smartphone manufacturer in 2012, but fell behind
ZTE and Huawei during the final three months of the year.
To woo
customers back, HTC tried a couple of strategies to juice its smartphone
sales, saying last year that it would concentrate on developing fewer,
higher-quality phones, then saying after its first-quarter earnings
report that it would concentrate on lower-priced phones in emerging
smartphone markets such as China.
Samsung, meanwhile, has used
its leading position in the smartphone market to offer a wide variety of
phones to consumers at a range of prices. But it needs sales of premium
devices such as the Samsung Galaxy S 4 to stay strong while it tries to
court first-time smartphone buyers with cheaper phones.
The company will deliver a full earnings report at the end of July.
The
strong, but not astronomical, sales figures implied by both companies’
earnings comes after worries that Apple and its iPhone aren’t selling as
well as more advance smartphone markets such as the U.S. and Western
Europe approach a saturation point for premium devices.
The
sales slowdown has also raised speculation that Apple will also be
jumping into the lower-end of the market with a cheaper version of the
iPhone, though Apple chief executive Tim Cook has said that the company
isn’t interested in making lower-quality products solely in the pursuit
of revenue.
“We aren’t interested in revenue for revenue’s sake,” Cook said during the company’s January earnings call. “We could put the Apple brand on a lot of things and sell a lot more stuff.”
