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HTC optimistic despite global trends

Potentially weak consumer spending and signs of a slipping US economy induced by the subprime mortgage crisis is not expected to trouble High Tech Computer Corp (HTC, 宏達電), which predicts another year of strong growth.

"We saw explosive, exponential growth in India last year, which was a pleasant surprise for us. Everything went very smoothly and we intend to replicate our experience in other emerging markets that have huge potential, such as Russia and China," HTC Asia vice president Jack Tong (董俊良) said yesterday at a product launch for new Touch-series cellphones.

The range of HTC products includes Smartphones, PDA phones and their Touch series, which features a family of three touch-screen phones, all of which tend towards the more upscale end of the cellphone market.

But in the last year or so, HTC began tapping into emerging markets such as China, Russia and some Southeast Asian countries with its lower-priced mobile phones, Tong said.

Shares of HTC closed 2.77 percent higher at NT$556 yesterday. Since the beginning of this year, HTC stocks have traded at an average price of NT$554, reaching a high of NT$593 on Monday and a low of NT$503 on Jan. 7, Taiwan Stock Exchange data showed.

"With the M-shaped economy, consumer purchasing power is becoming polarized, with volumes on the high and low ends of the mobile phone market increasing and the mid-range segment decreasing," said Jun Liao (廖景濬), an analyst with Polaris Securities (寶來證券).

HTC has the right strategy in marketing its main products in the upper segment, while pushing for growth in the low-end segment in emerging markets, he said.

The overall cellphone market could grow slightly this year, he said, adding that HTC should outperform its competitors.

HTC's revenue amounted to NT$118.6 billion (US$3.7 billion) last year and the figure is likely to hit NT$143.4 billion this year, marking 20 percent annual growth, Polaris Securities estimated.

"The Asian market was outstanding for us last year and we still see great potential in the US market. We expect Asia to extend our strong growth momentum this year," Tong said.

Last year, the first two Touch models, which went on sale in the second half of the year, sold approximately 2 million units.

In response to a reporter's question on whether that figure could double this year, Tong said only: "The HTC brand value and brand positioning in the cellphone market is very clear for consumers and the company is confident about its prospects for this year."

The HTC's latest Touch-series sets feature global positioning systems (GPS) and are supported by Chunghwa Telecom Co (中華電信).

"GPS has become a must-have function in cellphones and is a very clear trend," said Chen Chang-rong (陳長榮), vice president of Chunghwa's mobile business.

HTC said it had a very good market segmentation strategy with the Touch series and its long-term alliance with Chunghwa.

"Starting in Taiwan this year, we are going to target the younger generation and students pursuing higher education and we expect great results," Tong said.

Shares of Chunghwa rose 0.15 percent to NT$70.5 yesterday.
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