[Cesare21]

Out on Forbes, so I don't know how many will take this seriously.

HTC's Massive Handset Warning Is An Ill Omen For BlackBerry - Forbes

We have seen truly awful revenue warnings from HTC over the past 18 months � but nothing as devastating as the one the company just issued. HTC now forecasts 3Q 2013 revenues in the NT$50-60 B range, down sharply from NT$70.7 B it delivered during 2Q 2013. It�s the context that makes this forecast so chilling. HTC rolled out a brand new, redesigned flagship model HTC One during the spring quarter. The phone started rolling out in Asia and North America during the month of March. This means that HTC had ample time to ramp up the production of HTC One during the spring � and the company should be hitting peak period during the autumn quarter, with pricing power that a relatively new flagship model is supposed to possess.

How is it possible that HTC�s revenues can plunge by this much between spring and autumn even though it has a fresh, well-reviewed model possessing strong operator support? Incomprehensibly, HTC stated in its press release that �The new HTC One has performed well in the market, better than that of our hero products for the same period last year.� This seems to be completely at odds with the revenue warning � unless sales of all older HTC phones have caved in.

All this is directly relevant to BlackBerry, another second-tier smartphone vendor focusing on new flagship models that launched in the spring and are priced at around $600. HTC is a stronger brand in most Asian and European markets than BlackBerry � it likely is a stronger brand in the US market as well. Few would argue the HTC One did not receive as good or better reviews than the Z10 or the Q10.

HTC�s warning seems to imply that there is simply no room for expensive models from second-tier vendors. The iPhone and Galaxy S series are dominant in the high-end market, Samsung is moving aggressively into budget category, Google GOOG -0.26%�s Asian partners are exceptionally strong in the sub-$200 category. A flagship HTC phone priced high used to be a substantial hit just two years ago. Now it cannot even keep HTC profitable or prevent a double digit sales decline only three months after its debut.

If BlackBerry�s spring models are now facing the kind of flame-out HTC One is experiencing, the next winter is going to be exceptionally grim for the Canadian vendor. The other possibility is that HTC�s older models have become completely outdated due to harsh budget market competition. That angle also has a direct link here to BlackBerry; BlackBerry�s budget range is arguably far more old-fashioned than HTC�s aging value range.

Either way, the smaller luxury vendors are about to experience the fate of Thirties high-end car marques like Studebaker and Maxwell.

I have seen and felt that there has been a slowdown in the high-end device market and with BBRY launching their flagship Aristo series in the fall, I just want to know opinions of fellow CB users.

[howarmat]

BB still has august to get sales up before end of quarter! hopefully they do

[Cesare21]

BB still has august to get sales up before end of quarter! hopefully they do

Hopefully they should. I'm just thinking about the fall/winter quarter(s) and beyond. BBRY has already issued a revenue warning for the next quarter so it shouldn't surprise many.

[kidshah]

Look at the author of that article. BGR tool. End of story.

Posted via CB10

[Homo Erectus]

BB still has august to get sales up before end of quarter! hopefully they do

Stop it you we have failing product period

[EchoTango]

I'm not sure this is a reflection on Blackberry but more a comment on the industry as a whole. As all product evolution unfolds towards the end of the invovation cycle, we see comodiitization take over as the market become more crowded with "me to" products. As any economics student will tell you, over supply means price reductions until the next inovation comes along. What's exacerbating the smart phone market today is the significant dominance of two top players which seems to have the effect of extending the life of their "me to" products at the expense of the other significantly smaller players.Unless we see some departures of some other marginal players, the over supply situation will continue and will not be helpful to Blackberry.

It's probable that Android will have significant challenges in the near future as Google more agressively aserts its ownership and clip Samsung's wings which might provide an opening for the marginal players like Blackberry to exploit.

Until we see a major industry shakeout, Blackberry and the other small players will be fighting over the scaps.

[cjcampbell]

Something that was failed to be mentioned in the article is that the HTC First was a dismal failure and that falls within this quarter for them. Not sure how that would reflect on the warning, or if they really took a major loss due to any agreements with FB but logically it is something worth mentioning.

[kfh227]

Hopefully they should. I'm just thinking about the fall/winter quarter(s) and beyond. BBRY has already issued a revenue warning for the next quarter so it shouldn't surprise many.

When did that happen?

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[BB-04]

Hopefully they should. I'm just thinking about the fall/winter quarter(s) and beyond. BBRY has already issued a revenue warning for the next quarter so it shouldn't surprise many.

The difference is the revenue drop is expected with BB. While transitioning users from BB7 to BB10 revenue will drop from the loss of BIS fees. Now if that is the only thing going to affect revenue I don't know.

[cjcampbell]

The difference is the revenue drop is expected with BB. While transitioning users from BB7 to BB10 revenue will drop from the loss of BIS fees. Now if that is the only thing going to affect revenue I don't know.

Actually they never stated to expect a reduction in revenue, but to expect an overall loss. This is due to the next stage of the transition which will incorporate a lot of extra spending in investing strategies. As for the transitioning from legacy to BB10, yes, there will be a reduction in service revenue but there will also be a gain in device revenue which, at current margins, makes up for the service revenue, at least for the short term. The selling of legacy devices has been at or slightly below cost and the service revs were approx. 3-5 dollars per month. Due to the sales of BB10 devices in the last quarter, as low as they were, revenues were actually up in almost all regions.

[richc3]

Won't we get the Venezuelan 70 mill or so (may have been 50) on the books for the upcoming quarter? That may artificially inflate earnings.

[cjcampbell]

Won't we get the Venezuelan 70 mill or so (may have been 50) on the books for the upcoming quarter? That may artificially inflate earnings.

Not sure when/if they'll get that back. And I wouldn't call it artificially inflating unless you can call it artificially deflating the last earnings. Of course, if the moneys are collected by q end, it will be spun as just that.

[mrfreetruth]

Let me get this straight.... bad HTC news is bad for BlackBerry and good HTC news is bad for BlackBerry? the negative paid bashers are spinning everything into a negative but that is what they are paid to do. It's just to obvious.


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[njblackberry]

I believe that BlackBerry has already warned about this quarter.
Again, who pays you?

[neteng1000]

Let me get this straight.... bad HTC news is bad for BlackBerry and good HTC news is bad for BlackBerry? the negative paid bashers are spinning everything into a negative but that is what they are paid to do. It's just to obvious.


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Because Tero is a ****** DB. Nothing more nothing less

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[mathking606]

revenue for BB has risen since the launch of the Z10 so I don't think there revenue is as bad as HTC but their overall profitability is not good.

[Andy321]

All this illustrates is that the pure manufacturers can't make a go at it, other than Samsung (for the moment). Hardware margins are tiny. BlackBerry isn't a pure hardware company so...no comparison. Incidentally, this illustrates why TH is right to say that BlackBerry's focus isn't on the hardware race.

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[Dapper37]

HTC is faced with the differentiation factor in the android universe. BlackBerry does not face the same issue. I'm not saying BlackBerry has it easy but it's climbing a different hill then HTC. IMO

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