Facebook Can't Save HTC as Earnings Miss: Analyst
HTC, the Taiwanese mobile maker, announced Monday profits hit a record low in the first quarter and one analyst told CNBC that a new tie-in with social media site Facebook has little potential in resurrecting the company's fortunes.
The HTC First handset, which has Facebook's new software built-in, was unveiled last week to much fanfare. But Dennis Chan, analyst at Yuanta Securities told CNBC there was little upside for HTC from the deal.
"For the Facebook phone I think that impact is minimal," he told CNBC Monday.
"Facebook Home is more like an app, rather than a phone, so for other brands such as Huawei, ZTE and Lenovo, Sony, Samsung etc. they will all come out with their phone that will support this app. So essentially everyone else will have their own Facebook phone."
Facebook's new Home application - which will run on Google's Android operating system - allows users to set the Facebook platform as their home screen, drawing the user into the Facebook ecosystem. The HTC First is set to retail at around $100 and be available on the AT&T network in the U.S. with the Home app available from April 12.
HTC reported a sharp drop in first-quarter profits, caused by a delay in its flagship smartphone, the HTC One. Net profit was 85 million Taiwanese dollars ($2.85 million) in the quarter, compared with 1 billion Taiwanese dollars in the prior quarter and 10.9 billion Taiwanese dollars in the same period last year. The report missed analysts' estimates of 467.5 million Taiwanese dollars, according to a Reuters poll.
HTC had big expectations for its new flagship phone with a high profile soft launch just before February's Mobile World Congress (MWC) in Barcelona.
The HTC One carried home the "best in show" award at the MWC and pundits had raved about the technical brilliance of the handset. But that has failed to translate to sales, with a delayed full launch for the device.
A camera shortage was the reason for the HTC One's delay and only three markets have now received the new phone in the first quarter instead of a planned 80. Thus, the device will now be up against Samsung's new offering which is available for purchase later in the month.
"I think they have a relatively good product. The problem is that they're losing the window of opportunity because of all those component shortages," Chan said.
"Right now the Sony Xperia Z is pretty strong and Samsung S4 has just launched and will go into mass production by the end of April."
HTC shares were down 2.23 percent on Monday and have fallen 20 percent since the start of the year.
—By CNBC.com's Matt Clinch