High Tech Computer Corp's (HTC,
HTC's share price yesterday dropped 6.97 percent to NT$828 (US$25.49) on the Taiwan Stock Exchange, bringing the decline to about 20 percent since the company said it planned to buy local handset vendor Dopod International Corp (
The move by the world's biggest maker of phones operating on Microsoft Corp's system goes against a growing trend in the industry, where phone makers are splitting their brand and contract manufacturing businesses to help ease customers' concern. Acer Inc, for instance, spun off its design and contract manufacturing and set up Wistron Corp (
"Investors sold their shares as they were worried that HTC may have a conflict of interest with its customers if it aggressively pursues own-brand development," said Lu Chia-lin (
Pushing one step forward into the brand business, High Tech Computer, which supplies phones to mobile service carriers like Vodafone Group and NTT DoCoMo Inc, unveiled its first batch of phones under the "HTC" brand in London on Thursday.
"As long as the company continues to prioritize its carrier customers, which the management stressed, we see no conflict," said Dominic Grant, an analyst with research house Macquarie, in a report issued yesterday.
Taking a more cautious stance, Vincent Chen (
Boosting its own-brand operations would mean rising sales, marketing and research and development expenses, Chen said.
Chen added that the "Dopod acquisition seems a bit redundant," as market leaders Nokia and Motorola have only one brand name.
Chen lowered his earnings forecast for HTC this year by around 10 percent to reflect the potential impact from the company's branding strategy after the Dopod deal was announced.
Chen forecast that the company would earn NT$26.68 billion, or NT$74.7 per share this year, down from his earlier estimates of NT$29.71 billion, or NT$83.2 a share. He retained a "buy" rating on HTC, but cut the 12-month price target to NT$1,326 from NT$1,782.
BUSINESS UPDATE: The iPhone assembler said operations outlook is expected to show quarter-on-quarter and year-on-year growth for the second quarter Hon Hai Precision Industry Co (鴻海精密) yesterday reported strong growth in sales last month, potentially raising expectations for iPhone sales while artificial intelligence (AI)-related business booms. The company, which assembles the majority of Apple Inc’s smartphones, reported a 19.03 percent rise in monthly sales to NT$510.9 billion (US$15.78 billion), from NT$429.22 billion in the same period last year. On a monthly basis, sales rose 14.16 percent, it said. The company in a statement said that last month’s revenue was a record-breaking April performance. Hon Hai, known also as Foxconn Technology Group (富士康科技集團), assembles most iPhones, but the company is diversifying its business to
Apple Inc has been developing a homegrown chip to run artificial intelligence (AI) tools in data centers, although it is unclear if the semiconductor would ever be deployed, the Wall Street Journal reported on Monday. The effort would build on Apple’s previous efforts to make in-house chips, which run in its iPhones, Macs and other devices, according to the Journal, which cited unidentified people familiar with the matter. The server project is code-named ACDC (Apple Chips in Data Center) within the company, aiming to utilize Apple’s expertise in chip design for the company’s server infrastructure, the newspaper said. While this initiative has been
GlobalWafers Co (環球晶圓), the world’s No. 3 silicon wafer supplier, yesterday said that revenue would rise moderately in the second half of this year, driven primarily by robust demand for advanced wafers used in high-bandwidth memory (HBM) chips, a key component of artificial intelligence (AI) technology. “The first quarter is the lowest point of this cycle. The second half will be better than the first for the whole semiconductor industry and for GlobalWafers,” chairwoman Doris Hsu (徐秀蘭) said during an online investors’ conference. “HBM would definitely be the key growth driver in the second half,” Hsu said. “That is our big hope
The consumer price index (CPI) last month eased to 1.95 percent, below the central bank’s 2 percent target, as food and entertainment cost increases decelerated, helped by stable egg prices, the Directorate-General of Budget, Accounting and Statistics (DGBAS) said yesterday. The slowdown bucked predictions by policymakers and academics that inflationary pressures would build up following double-digit electricity rate hikes on April 1. “The latest CPI data came after the cost of eating out and rent grew moderately amid mixed international raw material prices,” DGBAS official Tsao Chih-hung (曹志弘) told a news conference in Taipei. The central bank in March raised interest rates by