High Tech Computer Corp (HTC, 宏達電), the world's largest manufacturer of handsets that run on Microsoft Corp's Windows operating system, saw its share prices close limit-down yesterday as Apple Inc's launch of its new iPhone prompted investors to worry about the outlook for HTC's smartphones.
The faster, cheaper 3G iPhones are expected to compete with HTC’s Touch Diamond smartphones, which were launched last month. The Touch Diamond handset uses a high-speed 3.5G Internet connection and is priced at US$800 per unit, compared with a starting price of US$199 for the new iPhone.
“The market is worried that HTC’s Diamond shipment target will come up short of the company’s prior expectation of 3 million units for 2008,” SinoPac Securities Corp (永豐金證券) analyst George Hung said in a client note yesterday.
HTC shares opened lower and soon fell through the NT$784 resistance level in early trading. Minutes after 10am, the stock had dropped 6.93 percent and was locked in the down-limit band to close at NT$765, underperforming a 2.54 percent decline on the benchmark TAIEX.
The stock has gained 27.72 percent so far this year, Taiwan Stock Exchange tallies show.
Merrill Lynch & Co said in a report yesterday that it would downgrade HTC, after Citigroup first listed the stock as “unattractive” last month.
“Apple is technically capable of supporting a global launch and carriers would be willing to support the 3G iPhone at an appealing price,” Merrill Lynch’s Taipei-based analyst Tony Tseng (曾省吾) wrote in the report yesterday. “HTC’s shipments of old models and even Diamond models particularly to Europe will be negatively affected at least in Q3 2008.”
Tseng lowered his recommendation on the stock to “neutral” from “buy” and reduced his 12-month price estimate to NT$850 from NT$940.
Citigroup analyst Kevin Chang (張凱偉) gave a target price of HTC to NT$750 in a report dated May 24.
Shares of other Taiwanese smartphone makers were also hit by the iPhone news. E-Ten Information Systems Co (倚天資訊) dropped 3.2 percent to NT$54.7, while Compal Communications Inc (華寶通訊) fell 4.1 percent to NT$53.3.
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