HTC Profit Suffers Due To Component Shortages For HTC One

8 April 2013

Bloomberg:

HTC lost early momentum for its HTC One handset in February as a shortage of camera components forced it to delay shipments in key markets by as much as a month. Prospects for revenue to rebound this quarter may be limited as the new device becomes widely available less than a month before Samsung Electronics Co.’s new Galaxy S4, which goes on sale in the U.S. on April 26.

In March, I wrote that industries always favour incumbents over new entrants. The camera shortages HTC is facing is an example of this. As HTC is relatively small, they don’t have the market power to secure fulfillments in the same way Apple and Samsung can.

As a result, HTC is now left floundering with poor results this quarter (98% lower net income year-on-year) and grim prospects for next quarter, as component availability does not appear to be improving and HTC will lose their exclusivity as the only new flagship phone.