HTC faces tough quarter ahead as sales slow regionally
By Edwin Yapp August 7, 2012
- Taiwanese handset maker expected to struggle in the coming quarter due to softening markets
- China the only region that has potential to grow as competition expected to further increase
HTC Corp faces an uphill battle in its handset sales going into its third quarter, noting that sales for its devices in all regions except China are expected to decline. The Taiwanese handset giant forecast as much as a 23% fall in its overall revenue, according to a report from Reuters.
The wire agency reported that HTC sees third-quarter (July to September) revenue at between T$70 billion and T$80 billion (US$2.3 billion and US$2.7 billion), compared to T$91 billion in the second quarter (April to June).
The Taipei-based giant is expected to earn T$92.51 billion in revenue in the third quarter, according to the median of 18 analysts polled by Thomson Reuters.
"China will continue to see growth in the third quarter, while other markets will have different degrees of decline," Chialin Chang, HTC's chief financial officer, was quoted as saying at an investor conference, according to Reuters. "Europe, Middle East and Africa will face challenges because of macro softness and competition."
Once considered to be an emerging upstart to the more established brands including Nokia, Motorola, Samsung and Sony Ericsson (now Sony), the world's number five smartphone maker began life in 1997 as a laptop and wireless handheld device contract manufacturer.
The company quickly gained a reputation for being able to produce quality wireless products for its clients, which spawned notable devices such as HP's iPAQ and Palm Treo 650.
HTC saw its best year in 2010, when its share more than tripled in the 14 months to April 2011, reaching T$1,238.10, while sales grew four-fold in one-and-a-half years, noted Reuters.
But in the last two years, HTC has been badly hit by increasing competition, particularly from Samsung Electronics. South Korea's most successful tech powerhouse makes the hugely popular Galaxy series of smartphones based on Google's Android operating system (OS), the same OS which HTC uses to market its line of smartphones. Stiff competition also came from Apple's latest models, the iPhone 4 and 4S, which were introduced in the last two years.
Reuters also reported that HTC's shares closed last Friday at T$277.50, their lowest in around two-and-a-half years. The wire service added that just last month, HTC said profit more than halved in the second quarter after European sales disappointed and phones destined for the US market were held up by customs inspections.
(T$1 = US$0.0333)