HTC expects 30% decrease in revenue in Q3

There was some disagreement between analysts of how HTC will perform in Q3 – Wall Street was looking at flat growth quarter on quarter, while Australian firm Macquarie Securities predicted a 15-20% drop in sales due to lower HTC One demand (HTC's main money maker).

It turns out Macquarie was closer to the mark but even its expectations weren't quite right – HTC has come out with a statement that revenues in Q3 will be as much as 30% lower than Q2.

Q2 started off good for HTC, but a tough third month lead to a decrease in revenues compared to the previous year's quarter - $4.1 billion in Q2 2012, $2.36 billion in Q2 2013. Now HTC is expecting $1.7-2 billion in Q3 2013. The revenues in Q3 2012 were $2.35 billion, the average of 22 analysts' predictions for Q3 this year was $2.53 billion.

HTC says it expects "fierce" competition in the high-end market (where the HTC One is) and the mid-range market (where the new HTC One mini is), which will hurt the company's sales. The profit margins will be slim too.

The company said in its statement:

"Our overall gross margin has been impacted by a relatively higher cost structure, lack of economy of scale and certain provisions needed to facilitate the clearance of aging products."

Source