HTC's Q4 profit falls by 90 percent

The company has to improve its marketing to compete with Samsung and Apple, an analyst says

HTC's net profit for the fourth quarter of 2012 fell by 90 percent year-over-year, as the Taiwanese smartphone maker continues to struggle amid heated competition.

HTC's net profit for the fourth quarter was NT$1 billion (US$34.4 million), down from NT$10.9 billion in the same period a year ago. Revenue was NT$60 billion, a 40 percent decline from the NT$101.4 billion it generated during the fourth quarter in 2011.

For HTC, the fourth quarter was a bad end to a bad year, during which it struggled -- as did many other smartphone makers -- to compete with the increasingly dominant Samsung Electronics, and Apple.

"HTC has wonderful devices, but its marketing execution has been crap," said Malik Saadi, principal analyst with market research company Informa Telecoms & Media.

HTC has recognized its shortcomings in this area and at the end of November the company hired Benjamin Ho as chief marketing officer. His first task is to refocus the company's global marketing efforts.

Ho previously worked at mobile operator Far EasTone Telecommunications, as well as Motorola and advertising agency BBDO.

To turn around its fortunes, HTC will have to make its smartphones more visible in stores, and also increase the commissions it pays to retail staff and better educate them on what it has to offer consumers, according to Saadi, who thinks HTC should also consider opening its own stores.

HTC should also look for more partnerships in the consumer electronics market with vendors that also want to compete with Apple and Samsung, and it might get some help from Amazon, according to market research company CCS Insight.

It has predicted that Amazon will realize that developing handsets on its own isn't viable and will instead choose HTC as a partner, acquiring a stake in the company to secure a long-term commitment.

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Mikael Ricknäs

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