14 DAY TRIAL // HTC has apparently posted online a press release stating that it had an operating loss of %138 million in Q3 2015. This is even worse, as during the same period last year, HTC at least made some minimal profit.
According to the said press release, the company's quarterly revenue came in at NT$21.4 billion (about $659 million) with an operating loss of NT$4.94 billion. This is half of what it did just one year ago, as in 2014 it made NT$41.9 billion in revenue.
Apparently, the massive drop in sales and obviously in profit came mostly because of increased competition in all segments of the smartphone market. But this is not all. The main cause seems to have more to do with Chinese socio-economic development than simply "competition."
First, the Chinese markets are being artificially inflated by larger state-owned companies and their satellites, and they some survive with building low-end handsets as their shares are being constantly infused with state cash in order to keep the Chinese economy floating. All other companies are left to rot.
HTC's last hope is Valve's Steam VR
This is HTC's case as well, so now the company is in a free fall and has recently announced that it is laying off 15% of its workforce in what is probably one of the largest job cutbacks in the industry this year after HP.
Apparently, HTC chose to layoff so many people by saying that it would "create greater focus and profitable growth in areas like premium smartphones, virtual reality and connected lifestyle products." But since the company lost half of its revenues from one year to another, it's a mystery from where it would muster enough funds to continue the Steam VR project together with Valve without finding an additional partner.
The future is certainly problematic for HTC, and the company's only hope of coming back on positive revenues is the financial muscle of Valve and how well Steam Boxes will sell in the future. Since the company dropped from the TWSE 50 stock index in Taiwan, it's a sign that Steam VR is probably HTC’s last hope before an eventual buyout.