Sat, Feb 07, 2009 - Page 12 News List

HTC expects steady first-quarter sales

OPTIMISM: While first-quarter demand may be lackluster as vendors are still digesting inventory, HTC expects sales to recover when it launches more Android-based models

By Elizabeth Tchii  /  STAFF REPORTER

HTC Corp (宏達電), the world’s largest maker of handsets running on Microsoft Corp’s system, yesterday said that revenues were likely to be flat this quarter amid slowing global demand. However, the company retained its target of double-digit growth in revenue for the full year, aided by new product releases.

Revenues could reach NT$33 billion (US$978 million) this quarter, HTC said, representing an increase of less than 1 percent from NT$32.7 billion in the first quarter of last year, or a drop of about 30 percent from NT$47.4 billion last quarter.

HTC’s guidance is slightly lower than Macquarie Securities’ forecast of NT$35 billion.

Demand for handsets — by HTC and other makers — may weaken this quarter, as handset channel and telecom operators aggressively digest their inventory, HTC chief executive Peter Chou (周永明) told investors.

Chou said the first quarter could be the worst period for handset makers, but he believed that HTC would see business rebound in the second quarter, helped by the introduction of more new products and growing demand for touch-screen smartphones.

“Sales growth can be expected to pick up quarter on quarter from a low in the first quarter,” Chou said.

Chou reiterated the company’s goal of double-digit growth in revenues this year from the NT$152.6 billion it generated last year.

The company plans to launch more Android-based mobile phones this year after shipping the first batch of such phones last year to US wireless operator AT&T, he said.

“Our strategy for this difficult year revolves around the HTC brand experience. We will speed up new product releases, as well as release more models in order to tap into a discerning customer base worldwide by offering them simplified yet differentiating devices for various needs,” Chou said.

He did not elaborate on the company’s product roadmap.

HTC may roll out 20 new models this year with diversified features, Macquarie said in a report released in the middle of last month.

Operating gross margin may be flat at 30 percent this quarter, compared with 30.1 percent last quarter, HTC said.

But the gross margin may improve quarter on quarter this year, ending the downtrend last year, Chou said.

At its board meeting later this month, the company also plans to propose distributing high annual cash dividends of NT$20 billion this year and next year.

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