Sat, Oct 15, 2011 - Page 11 News List

HTC to remain a winner in high-end phones: Barclays

Staff Writer, with CNA

HTC Corp (宏達電) will remain a winner in the high-end smartphone market when macroeconomic demand resumes in 2013, according to Barclays Capital’s forecasts.

Barclays Capital said on Wednesday that ongoing macro issues in Europe and the US would hurt overall consumer demand next year and that high-end smartphones would not be exempted.

“While we believe that the macro headwinds in the US/EU might weigh on the smartphone space, we expect HTC to continue to be a winner in high-end smartphones when demand resumes in 2013, due to its improved specs and well-received user interface,” research analyst Dale Gai (蓋欣山) said.

He estimated that HTC would ship 13.7 million smartphone units in the fourth quarter, up 3 percent from the 13.3 million units it shipped in the third quarter.

“We expect HTC and its supply chain to see a muted fourth quarter ... due to competition from Apple and Samsung,” Gai said.

The analyst also forecast that HTC’s blended average selling price (ASP) would decline only 1 percent in the fourth quarter from the previous period, as better ASPs from high-end models offset higher sales contribution from mid-priced smartphones.

As for market concerns over a patent lawsuit battle between HTC and Apple, Gai said the most likely outcome was the two companies would reach a settlement.

Assuming HTC shells out US$5 per handset in royalty payments to Apple starting next year, Gai estimated this could negatively affect HTC’s earnings by 4 to 5 percent.

Barclays Capital maintained its “overweight” rating on HTC, with a target price of NT$950.

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