HTCâs latest financials make for anotherÂ fairly dismal read for the mobile device and VR headset maker, though â crumbs of comfort â itâs making a slightly smaller year-over-year loss. ItsÂ operating loss for Q4 2016 was NT$3.6 billion ($116.8M) vsÂ a loss of NT$4.1 billion ($133.1M) in Q4 2015.
Revenue for Q4 2016 wasÂ also down at NT$22.2 billion ($720.7M), which is a year-over-year drop of aroundÂ 13 per cent. Not great news, clearly, but less of a YOY revenue slide than in otherÂ recentÂ quarters.
However gross margin declined year over year too, dropping from 13.9 per cent in Q4 2015 to 10.5 per cent in Q4 2016. While HTCâs year over year operating margin was almost the same, at -16.0 per cent for the quarter.
In its report for Q4, HTC claims ârobust sales performanceâ and notes sequential revenue âimproving sequentially over 2016â, though revenue was actually flat between Q3 and Q4 â at a point in the sales cycle when you mightÂ be expecting a holiday boost to earnings.
HTC also flags what it describes as âaggressively managedâ operating expenditure deliveringÂ a 34 per cent cost reduction for the business over the course of the year.
But efficiency savings canât in themselves beget business turnarounds â that requires a string of product wins. And virtual reality is a risky bet for HTC to be making for that, given the lack of proven consumer demand for such a nascent tech.
In recent years loss-making quarters have becomeÂ the norm for the Taiwanese company, which posted its first ever loss making quarter in Q3 2013. Since then, the raft of management changes,Â portfolio tweaksÂ and aÂ partnership with games publisher Valve focused on virtual reality have yet to translate into any sustained upwardÂ momentum for HTCâs business.
On the product front â beyond itsÂ ongoing efforts to tout its Vive VR playÂ â Q4 saw HTCÂ putÂ outÂ several mid tier handsets badged withÂ existing/long-in-the-tooth brand names, such as Desire and Evo.
NotablyÂ itâs since launched what it dubs a ânew directionâ for its phones business, announcing last month a new mobileÂ brand, HTC U, for a range of handsets pre-loaded with a newÂ AI assistant. Not having aÂ much needed smartphone refreshÂ ready to go inÂ Q4 clearlyÂ didnât help its sales performance in the quarter.
HTC was also the design and manufacturing partner for Alphabetâs new Google-brandedÂ Pixel handsets, which launched during the quarter. ButÂ there are few signs thatÂ relationship has translated into substantial sales revenue for HTC.
Its Q4 report providesÂ little detail on anyÂ future plans, merelyÂ pointing to its continued investment of effort to tryÂ to establishÂ a sustained market forÂ VR.
âHTC continues to build the virtual reality ecosystem around HTC VIVE, with several events underlining the growing reach of the Vive platform, including opening the first VIVE-based arcade in Taipei, first demo days for VIVE X accelerator program in Beijing, Taipei, and San Francisco, and the launch of VIVE studios,â it notes.