HTC forecasts more losses for quarter

However, industry analysts are not particularly optimistic about how HTC, and some expect the company would continue to struggle for the next four quarters.

HTC said in a statement that it “has begun to implement company-wide efficiency measures to reduce operating costs across the organization and ensure resources are appropriately allocated to future growth”.

The second quarter of 2015 was not kind to HTC as revenue for the Taiwanese phone maker slid significantly and its profits from last year turned to losses this time around. The company also forecast preliminary losses for this year’s third quarter. No longer king of the mountain, HTC is reportedly planning to slash its workforce and scale back the number of smartphones it offers.

HTC chief financial officer and president of global sales Chang Chia-lin (張嘉臨) said the forecast for this quarter was a result of a “transition period” for the company’s products.

Commenting on the company’s non-smartphone segments, Chang said HTC foresees business opportunities for Internet-connected devices, such as the GPS-enabled Grip – a wearable device codeveloped with strategic partner Under Armour Inc.

HTC plans to cut staff, reduce spending and slim down its product catalog as cheaper phones from Huawei Technologies Co. and competition from Samsung Electronics Co. further erode its market share.

HTC acknowledged that demand has been “weaker than expected at the high end” of the smartphone market and that sales in China have been “weak”. According to Chang, HTC now holds 20% of the smartphone market in emerging markets, such as India. HTC is hoping the Vive will help it attract interest from video game enthusiasts and developers. HTC share prices have shed more than 50 per cent this year, closing at Tw$70.0 Thursday.

Analyst Calvin Huang of Taiwan’s SinoPac Securities wrote recently, “We believe HTC will keep losing share in the smartphone market and will keep losing money”.

HTC’s ongoing development of a virtual reality headset, and other consumer electronics may pay off in the future, she added.