HTC One delay sees disastrous profit drop for Taiwanese firm

HTC is paying the price for delaying the release of its new HTC One flagship smartphone, with the Taiwanese manufacturer today announcing a record-low quarterly profit since it began reporting its earnings in 2004.

The impressive-looking HTC One was charged with leading the firm’s attack on 2013 and closing the gap on market leaders Samsung and Apple, but a shortage of components including metal casings and camera parts has seen the phone launch in just three markets instead of the 80 planned for the first quarter.

The delay has resulted in a huge 99 per cent drop in net income from the same period last year, marking HTC’s sixth consecutive quarter of declines. The firm has announced an audited net profit of T$85 million (£1.8 million) for January to March 2013, down from T$1 billion (£22 million) last quarter and T$10.9 billion (£2.4 billion) from the corresponding period in 2012.

With the HTC One not expected to reach stores in Europe, North America and the Asia-Pacific region before the end of April, the phone has lost the head start it had on the feverishly-anticipated Samsung Galaxy S4. With competition mounting as the year unfolds, analysts believe the damage to HTC may be long-lasting.

"As HTC failed to establish its brand image by selling its most important flagship phone on time, it'll be very difficult to push on the mid- and low-end phones when HTC launches them in Q3-Q4," Dennis Chan of Yuanta Securities told Reuters. "Sales in the second quarter will bounce, but they will lose momentum again in Q3-Q4."

HTC was last week announced as the first official partner for the new Facebook Home mobile UI, and will host the software on a mid-range device known as the HTC First. But Daiwa analyst Birdy Lu says the high-profile alliance may not be able to compensate for the HTC One delay.

"The Facebook phone is not enough to turn HTC around," Lu said to Reuters. "Facebook Home could be only good for Facebook addicts, and the distribution channel for HTC First is very limited. HTC's 2013 performance is still highly dependant on HTC One."

Mobile commentators will be as disappointed as HTC fans over the problems surrounding the One, as the premium device looked a serious challenger to Samsung and Apple’s smartphone dominance when it was unveiled in February. Indeed, with its sleek aluminium casing and sharp 4.7in display the HTC One picked up 4-and-a-half stars in our recent review.