HTC Corp (宏達電), the biggest maker of mobile phones running on Google Inc’s Android and Microsoft Corp’s Windows operating systems, reported a drop in earnings yesterday for the third quarter, amid intense competition and dropping average selling prices of smartphones.
Third-quarter net income dropped 18 percent to NT$5.76 billion (US$179 million) from a year earlier, while total revenues declined 10.17 percent to NT$34 billion, the Taoyuan-based company said in a statement.
Sales last month fell 13.75 percent to NT$11.83 billion from a year ago, while total revenues for the first nine months of this year slipped 1.31 percent to NT$103.79 billion, the statement said.
HTC cut its whole-year sales forecast in late July to a decline of as much as 5 percent this year, from a prediction of 10 percent growth. The reduced outlook was caused by a delay in the introduction of handsets from the second half of the year to next year, lower contract-manufacturing orders and slower-than-expected demand of third-generation handsets from China, the company said.
“HTC has been faring well in the smartphone arena, but it is feeling the heat as the competition intensifies,” Lu Chun-kuan (呂俊寬), a senior research analyst at Gartner Taiwan, said by telephone.
The maker of the market’s first Android handset going head-to-head with Apple Inc’s iPhone, Research in Motion Ltd’s BlackBerry, Palm Inc’s Pre handset and smartphone models from Nokia and others.
Smartphones are poised to be the next growth engine for the mobile phone industry, but more consumers are going for mid-tier smartphones instead of high-end ones, which depresses overall average selling prices, Lu said.
HTC will introduce a number of new smartphones running on the latest Windows Mobile 6.5 in the fourth quarter.
The UK telecom operator O2 will reportedly unveil HTC HD2 on Monday. The phone will reportedly offer the “largest mobile screen yet” — a 4.3-inch touchscreen.
US operator Verizon Wireless launched HTC Imagio yesterday, retailing at US$199.99 for a two-year contract. The Imagio lacks a slide-out QWERTY keyboard but comes with a 3.6-inch touchscreen, Verizon’s Vcast Mobile TV and a 5-megapixel camera.
US wireless carrier AT&T rolled out its first Windows Mobile 6.5 model on Monday — the HTC Pure — priced at US$150 with a two-year contract. The phone was rebranded from the earlier HTC Touch Diamond 2, which comes with a 3.2-inch touchscreen.
Despite its launch of new models, HTC’s fourth-quarter revenue could disappoint investors again, Citigroup analyst Kevin Chang (張凱偉) said in a client note yesterday.
“We believe the company is suffering from relatively low awareness of Android models in Europe and aggressive share gain of the Apple iPhone around the globe,” Chang wrote.
In the long term, Chang said the company could face challenges such as weak unit sales, falling average selling prices and slow but consistent margin erosion.
“We believe HTC needs time to examine its business model, and in a new environment where mass adoption is happening, its firm pricing strategy may need to take a backseat,” he wrote.
HTC shares edged up 0.7 percent yesterday to close at NT$355 in Taipei trading.
ADDITIONAL REPORTING BY KEVIN CHEN
Gogoro Inc (睿能創意) yesterday launched its first electric bicycle, the Gogoro Eeyo 1, in Taiwan, after unveiling the bike in New York in late May and in France on Tuesday. The company said it would also introduce the series in other European countries such as Germany and the Netherlands. The “Eeyo project” is the fourth of Gogoro’s eight projects that concentrate on smart transportation, which includes Gogoro’s electric scooter, battery swap system and electric scooter sharing service, company founder and chief executive officer Horace Luke (陸學森) told a media briefing in Taipei. “There are various types of city commuters. We will not
EXPERIMENTAL DRUG: While news about a COVID-19 vaccine is more eye-catching, developing a treatment would be more viable, the Senhwa boss said Senhwa Biosciences Inc (生華科) aims to raise NT$1.5 billion (US$50.57 million) by issuing 15 million new common shares in the third quarter of this year to fund the research of new drugs, including the experimental drug Silmitasertib for the treatment of COVID-19, the company said on Monday. That would be the firm’s largest fundraising effort after it raised more than NT$1.4 billion from an initial public offering on the Taipei Exchange (TPEX) in April 2017, chief financial officer Sarah Chang (張小萍) told the Taipei Times by telephone. The price of the new shares would depend on the firm’s average share price
NOT A PANACEA: Offering 5G services would not solve the problem of declining telecom incomes, chairman Sheih Chi-mau said, expecting a flat 5G telecom revenue Chunghwa Telecom Co (中華電信) yesterday became the nation’s first telecom to debut its 5G services, offering tiered tariffs that include a threshold of NT$599 and flat rates, as it aims to switch half of its subscribers to the 5G network within three years. Subscribers would have unlimited data transmission for monthly fees starting at NT$1,399 — the same flat rate as when the company launched its 4G service in 2014 — and they can subscribe to the highest-rate plan for NT$2,699 per month for faster data transmission speeds and larger bandwidth, the company said. Data transmission speeds would be within the range
STAYING AHEAD: TSMC expects its sales this year to grow 14 to 19 percent and could spend up to US$3.52 billion on research and development, leaving its rivals far behind Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) reported that the US last year approved 99 percent of its patent applications, which placed the tech giant among the top patent holders in the US. In its Corporate Social Responsibility Report, TSMC said it last year secured about 3,600 patents worldwide, including more than 2,300 in the US. As of the end of last year, TSMC owned more than 39,000 patents, the report said. The company last year filed almost 6,500 patent applications worldwide and ranked among the top 10 patent applicants in the US. In Taiwan, it was the largest patent applicant for the fourth