HTC has lost half of its profits since 2014
The company posted a press release online stating that it had a loss of %138 million during the 3rd quarter of 2015. This is even worse, as during the same period the previous year, it had at least a minimal profit.
According to the said press release, the company's quarterly revenue came to NT$21.4 billion (about $659 million), with an operating loss of NT$4.94 billion. That's half of what it had just a year ago, as in 2014 it had revenue of NT$41.9 billion. Apparently, the free fall in sales and profits came mainly due to increased competition in all segments of the smartphone market. But that's not all. The main reason seems to have more to do with Chinese socio-economic development, and not just "competition."
First, Chinese markets are “bloated” by the largest state-owned enterprises and their satellites, and some survive by making low-end devices as their stocks are constantly enriched with cash from the state to keep the Chinese economy viable. All other companies have been left to rot.
HTC's last hope is Valve's VR Steam
That's how things are for HTC, and now the company is in free fall and recently announced that it will lay off 15% of its workforce which is perhaps one of the largest job cuts in the industry this year, after HP.
HTC chose to lay off so many people, saying it would “create greater focus and profitable growth in areas like smartphones, virtual reality, and connected lifestyle products.” But given that the company lost half of its revenue year-over-year, it’s a mystery how it will raise enough capital to continue Steam VR with Valve without finding additional partners.
The future is certainly tough for HTC, and the company's only hope of returning to positive revenue is Valve's financial strength and how well Steam Boxes sell in the future.
