Tue, May 08, 2012 - Page 11 News List

HTC revenue plunges on intensifying competition

ONE SERIES:The phone maker is banking on its new smartphone model to lift its sales, but analysts are cautious amid competition from Samsung and Apple

By Kevin Chen  /  Staff reporter

Smartphone maker HTC Corp (宏達電) yesterday reported that sales last month fell 19.87 percent from a year earlier and that accumulated sales in the first four months of the year dropped 30.84 percent from the year before amid fierce competition from Apple Inc and Samsung Electronics Co, a company release said.

On a monthly basis, last month’s sales edged up 0.49 percent to NT$31.03 billion (US$1.06 billion) compared with NT$30.88 billion in March, helped in part by the launch of the company’s new One series smartphone products.

During the January-April period, revenue totaled NT$98.82 billion, down from NT$142.89 billion in the same period last year, the release showed.

HTC shares dropped 4.35 percent to close at NT$452 on the Taiwan Stock Exchange yesterday.

While HTC remained the second-highest priced share on the local bourse after Largan Precision Co (大立光), yesterday’s decline was bigger than the 2.11 percent fall of the benchmark TAIEX, Taiwan Stock Exchange data showed. Largan, the nation’s leading maker of handset lenses, edged down 0.62 percent to NT$477 yesterday.

Taoyuan-based HTC is counting on the success of its One series models to help narrow its gap with market leaders such as Apple and Samsung, especially after the launch of Samsung’s flagship Galaxy S3 smartphone on Friday last week in London and the widely anticipated introduction of Apple’s iPhone5, likely sometime in the second half of the year.

Samsung led the global smartphone market in the first quarter of the year, with shipments of 42.2 million units and a market share of 29.1 percent, according to the latest IDC quarterly report released on Tuesday last week.

Apple was the runner-up, with shipments of 35.1 million units and a market share of 24.2 percent, while HTC ranked fifth, with shipments of 6.9 million units and a market share of 4.8 percent, IDC said.

Samsung’s “aggressive marketing campaign, software/user interface additions that enhance the user experience and wider distribution should solidify its position in the high-end smartphone segment,” Morgan Stanley analyst Jasmine Lu (呂智穎) wrote in a report last week.

Lu said it would be difficult for HTC to compete with Samsung in terms of marketing, distribution and operator coverage, especially in such markets as Europe, the Middle East and Africa.

On April 24, HTC told an investors’ conference in Taipei that revenue would continue to decline in the second quarter, citing intensified competition with Apple and Samsung.

HTC said second-quarter revenue would reach about NT$105 billion, compared with NT$67.79 billion in the first quarter and NT$124.40 billion a year earlier.

Morgan Stanley said it expected HTC to meet its second-quarter guidance, with more than 10 million units being shipped in the quarter.

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