HTC Corp (宏達電), the leading maker of smartphones running on Windows Mobile and Android platforms, saw its shares drop by the daily limit yesterday as the company forecast lower profit margins this quarter amid launches of mid-range phones.
The company’s shares closed at NT$334.5 (US$10.1) on the Taiwan Stock Exchange, the lowest since Nov. 3. The benchmark TAIEX index dropped 0.51 percent yesterday to 7,560.03 points — the lowest close since the beginning of the year.
“The TAIEX kept its head above water in the morning session after yesterday’s [Tuesday’s] sharp 3.48 percent decline; however, selling pressure in the afternoon sent the index down 0.51 percent,” SinoPac Securities Corp (永豐金證券) said in a note yesterday. “The tech sector was dragged down by HTC after the company went limit-down on worse-than-expected guidance.”
HTC told an investor teleconference on Tuesday that its gross margins, a measure of profitability, will be between 29.5 percent and 30.5 percent this quarter, compared with 32 percent last quarter. Sales would be around NT$32 billion to NT$34 billion, up from NT$31.6 billion last quarter.
HTC CEO Peter Chou (周永明) said this year would be HTC’s “brand year,” as the company seeks to position itself as a global consumer smartphone brand.
As it aims to raise brand awareness, it may have to compromise gross margins to launch more mid-range models, Chou said.
“This is a confirmation of our view that market share and scale are more important than short-term profitability,” Citigroup said in a report on Tuesday night.
Based on HTC’s revenue and unit growth guidance, Citigroup estimates that the average selling price of HTC phones could fall 10 percent sequentially this quarter.
The average selling price of HTC’s phones was US$348 in the fourth quarter, unchanged from the previous three months. Its average selling price was US$367 in the fourth quarter of 2008.
“While we agree with HTC’s pricing strategy ... we expect HTC to go through a painful transition period in 2010 in which HTC could face both drastic average selling price and margin erosions,” Citigroup said.
Given its bearish view on HTC’s revenue growth and margins, Citigroup maintained its “sell” rating, with a target price of NT$250 — a 25 percent downside on yesterday’s closing price.
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
Malaysia’s leader yesterday announced plans to build a massive semiconductor design park, aiming to boost the Southeast Asian nation’s role in the global chip industry. A prominent player in the semiconductor industry for decades, Malaysia accounts for an estimated 13 percent of global back-end manufacturing, according to German tech giant Bosch. Now it wants to go beyond production and emerge as a chip design powerhouse too, Malaysian Prime Minister Anwar Ibrahim said. “I am pleased to announce the largest IC (integrated circuit) Design Park in Southeast Asia, that will house world-class anchor tenants and collaborate with global companies such as Arm [Holdings PLC],”
TRANSFORMATION: Taiwan is now home to the largest Google hardware research and development center outside of the US, thanks to the nation’s economic policies President Tsai Ing-wen (蔡英文) yesterday attended an event marking the opening of Google’s second hardware research and development (R&D) office in Taiwan, which was held at New Taipei City’s Banciao District (板橋). This signals Taiwan’s transformation into the world’s largest Google hardware research and development center outside of the US, validating the nation’s economic policy in the past eight years, she said. The “five plus two” innovative industries policy, “six core strategic industries” initiative and infrastructure projects have grown the national industry and established resilient supply chains that withstood the COVID-19 pandemic, Tsai said. Taiwan has improved investment conditions of the domestic economy
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