It’s hardly surprising that most OEM’s are starting to feel the pinch in the pocket. Let’s take a look at the recent announcement by HTC to begin with.
HTC announced their second quarter 2012 financial results amidst a 57.8 percent net profit drop, which still shows the company’s financials improving over the first quarter of this year. Combining weaker than expected European sales, along with customs issues in the US played a large role in financial numbers that are still well down from the same time last year. Consolidated sales from last month totaled T$30 billion, unchanged from May and a 33.4 percent drop compared to June of 2011.
Taken from Droid Dog
Let’s now look at what could attribute to this loss… well to begin with it really doesn’t help that Samsung have taken over them as top Dogs in the handset world (especially on the Android front) however it’s not just that.
HTC like other OEM’s for the past 2-3 years have flooded the market with as many handsets as they could possibly design and ship however this serves only as a hindrance given all the costs that go with having so many handsets on the market.
I don’t claim to be an expert in this field folks however it’s pretty obvious that charges come from research, design, manufacturing, marketing, shipping, repairs, testing, licensing and much much more so essentially, it’s not cheap to get a handset to the market which is the first bit contributor to the losses.
The next thing to look at is the consumer, with 24 month tariffs now pretty much standard across the UK and US there are less customers to target than before. Very few people can afford to have their contract running for 24 month and keep up to date with the plethora of handsets being released.
Another thing to look at is one which seems to pop up more and more just now – litigation. With Apple suing anyone that looks the wrong way these days OEM’s are having to throw terrible amounts of money at lawyers to deal with the these patent related suits.
Of course that’s just the basics, there are staff costs, training, building costs, and so much more to take into account but one thing that stand out in all of this is that it’s hurting the consumer.
HTC this year have changed their device release structure ensuring that fewer handsets are being released to the market which if you look at the report just released, is shown by the fact that sales are improving from Q1 to Q2.
Take note OEM’s… there are not enough customers to buy your devices now so please stop flooding the markets and save yourself some money.