Financial results for the first quarter of 2016 are gloomy

May 9, 2016 13:44 GMT  ·  By

Today, Taiwanese multinational manufacturer of smartphones and tablets, HTC released its first quarter 2016 results and they don’t look good at all. In short, the company revenue dropped a staggering 64% year-over-year, thus causing a fourth consecutive quarterly loss for the smartphone giant.

According to the report released by HTC, the company lost $148 million (about €129 million) in the first quarter of the year, between January 1 and March 31. Low sales seem to have caused revenue to collapse by $456.4 million (€400.6 million) for Q1/2016, compared to $1.28 billion (€1.12 billion) during the same quarter last year.

Considering the 64% drop in revenue, HTC has some big plans for the future, as it recently announced its intention to launch a separate VR business and invest $100 million (roughly €87 million) in developing content for the Vive virtual reality headset. The company has already started to sell some real estate in order to make up for the loss.

The corresponding quarter last year didn’t include sales of the HTC One M9, but that model fell below expectations as well and didn’t manage to boost company results by much.

HTC is optimistic about the next quarter

In the report, the company doesn’t seem too worried about the drop in sales, as it praises awards won at the Consumer Electronics Show (CES) and Mobile World Congress (MWC) for the HTC Vive virtual reality system and a series of smartphones.

HTC is optimistic about the future, since HTC 10 has just been launched in Q2 2016 and it has yet to impact company revenues. Still, we must take into consideration that pre-orders of the HTC 10 in China were less than satisfactory, the company sold only 251 units 11 days after the smartphones were made available.

The company has recently launched the One M9 Prime Camera Edition in Poland and a new commercial for the HTC 10, in an attempt to catch the attention of end users.

HTC anticipates ‘good momentum over the year,’ in part due to the launch of HTC Vive virtual reality system, as pre-orders started in February and deliveries were scheduled starting April 5.