To describe HTC’s last financial report as a disappointment would be quite an understatement since the company’s profits fell to just $2.85 million, a drop of 91.5 percent from Q1 2012. Due in no small part to the positive reception to the HTC One and its record number of pre-orders, the company is rather more confident about its prospects in Q2 2013. It has revealed that it expects revenue to grow by 63.6 percent sequentially to NT$70 billion (US$2.37 billion) and its gross margins to increase from 20.3 percent to between 22 percent and 24 percent.
Though this is clearly a positive development for HTC, it is worth noting that these revenue projections are still lower than market expectations, a fact that CEO Peter Chou has attributed to “product mix” and marketing expenses that have been raised by 80 percent to NT$7 billion (US$ 237 million). Chou further added that the compacts expect further improvement in its gross margin in Q3 2013 since demand for its “high margin” HTC One will “remain strong and its product mix will improve.”