HTC Finally Makes a Profit After a Three-Year Financial Drought, All Thanks to the Google Deal
HTC finally reported positive earnings over the three-month period ending on March 31 after nearly three years of continuous losses. This first quarter of 2018 was the company’s first profitable quarter after 11 consecutive quarters of losses and bear in mind that the Taiwanese phone manufacturer has yet to unveil its flagship for the year, so things might finally look positive for the company.
HTC Deal With Google Brought in $1.1 Billion for the Company
HTC’s net earnings for Q1 2018 is $710 million according to its consolidated financial report. The company managed to bounce back after having its worst-ever fiscal year in 2017, where it made a loss of $580 million. The company has finally recuperated. However, this is no stroke of luck and the success can largely be attributed to HTC’s recent deal with Google. The deal entailed transferring engineering talent and licensing the entire patent portfolio to the tech giant.
The deal was finalized last year and lasted until January this year and brought in $1.1 billion for HTC. It also made it easier for the company to do cost savings as many of the highly paid engineers left the company. Even though this could have negative consequences for the company in the sense that without this talent, it will find it harder to remain innovative and competitive in the long run, HTC is planning to diversify anyway.
The company is downsizing the smartphone operations and diverting its resources to its Vive division, which focuses on virtual reality. VR has comparatively lesser rivals and seems more promising. With its smartphone sales dipping at an increasing rate, HTC might give up on smartphones entirely.
Some industry insiders say that HTC wanted to sell off its mobile division to Google last year but Alphabet rejected the offer as it didn’t want to repeat the Motorola history. HTC is expected to release just one Android flagship this year, which is the HTC U12 Plus.
It will be officially unveiled on May 23 and who knows? This could be the model that will decide the fate of the company’s mobile division.
News Source: HTC