Struggling Taiwanese smartphone manufacturer HTC is cutting staff and shrinking the number of smartphones it makes, as its profits nosedive.



HTC, once a key player in Android and Windows Phone smartphones, has stumbled in recent years as competition from the dominant player Samsung and smaller, cheaper rivals has cut its market share.

The company announced on Thursday that it had suffered its biggest ever quarterly loss of Tw$8bn (£163m, $253m) in the three months to June, down from a net profit of Tw$2.26bn for the same period last year and a TW$360m net profit in the first quarter of the year.

The deficit was triggered by “weaker than expected demand at the high end ... along with weak sales in China”, the company said in a statement, which said third quarter revenues were forecast to fall to between TW$19bn and TW$22bn.

Chinese homegrown brands such as Xiaomi, Lenovo and many smaller players have undercut HTC with similar devices, while Apple and Samsung have squeezed the top end.

“Like Nokia and Blackberry, few smartphone makers are able to turn around once they lose in the battle for marketshare. Consumers quickly forget you,” said Jeff Pu, analyst at Yuanta Securities Investment Consulting.

Pu said he did not see an end to the company’s downward trend. Unlike BlackBerry or even Microsoft’s Nokia, HTC does not have other businesses or services to fall back on.

As global market demand declines, the company has pinned its hopes on new product areas like virtual reality, including forthcoming headset HTC Vive.

HTC said: “The company is working with over 1,000 developers on content creation over a wide spectrum of applications including gaming, entertainment and education, to ensure a compelling ecosystem ahead of the highly anticipated launch of HTC Vive at the end of the year.”

But even in the virtual-reality space HTC faces stiff competition from Samsung, Facebook and Google.

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