Fri, Aug 03, 2012 - Page 14 News List

HTC advances slightly in US mobile phone market

TOUGH COMPETITION:The handset maker is reporting quarterly figures today, with at least two foreign brokers predicting weak results because of a poor product mix

Staff writer, with CNA

HTC Corp (宏達電) remained the fifth-largest supplier of mobile phones in the US, but the struggling manufacturer has narrowed the gap between it and the leading players, research firm comScore said on Wednesday.

According to comScore, 234 million Americans aged 13 and older used smartphones and feature phones from April to June this year.

Samsung Electronics Co ranked as the top handset maker with 25.6 percent of US mobile subscribers, followed by LG Electronics Inc (18.8 percent), Apple Inc (15.4 percent), Motorola Mobility Holdings Inc (11.7 percent) and HTC (6.4 percent), it said.

Among the top five vendors, Apple recorded the biggest gain of 1.4 percentage points from the previous three-month period, while HTC’s market share rose 0.4 percentage points.

Google Inc’s unit, Motorola, dipped 1.1 percentage points, while LG and Samsung declined 0.5 and 0.4 percentages points respectively, it said.

In April, HTC said it would rely more on the smartphone markets in Europe and Asia in the face of the stiff competition in the US.

AT&T Inc, the second-largest US mobile operator, last month cut the price of HTC’s One X flagship smartphone from US$199 to US$99 for a two-year contract, less than three months after its launch.

Some analysts viewed the move as a bad signal because HTC had been able to sell its phones for six to 12 months prior to the price cuts.

HTC has also been doing well in China, with its cheaper “New Desire” series, which lifted its market share in the below-2,500 yuan (US$392) segment from 3 percent in the first quarter to 6 percent in June, they said.

The company is scheduled to report its latest quarterly results today, with two foreign brokerages forecasting a weak outlook for the struggling smartphone vendor, citing a worsening product mix and tougher competition.

“We maintain our view initiated since October 2011 that HTC is squeezed in the middle, with smartphone commoditization being accelerated by chip designer MediaTek Inc (聯發科),” said Aaron Jeng (鄭明宗), a Taipei-based Nomura Holdings Inc analyst.

“What’s worse, HTC seems to be losing share in the high-end smartphone space despite launching its One X flagship model both in China and the US,” he wrote in a research note on Monday.

“We expect competition will become tougher over the next 6-9 months, with iPhone 5 hitting the One X, and China-branded low-price dual-core and quad-core phones hitting the ‘New Desire,’” Jeng wrote.

In a separate note, Bank of America Merrill Lynch said it expected a 4 percent quarter-on-quarter drop in HTC’s third-quarter sales, with an operating margin of 8.6 percent.

Merrill Lynch said it expected HTC to launch a 5-inch Android smartphone, and models running on the touch-friendly Windows 8 system later this year.

However, the Windows-based smartphone has only a 4 percent market share currently and will likely remain a niche market player this year, while big-screen models will also face strong competition from Samsung, it said.

Bank of America Merrill Lynch Merrill Lynch analyst Robert Cheng (鄭勝榮) said HTC’s most important model launch was likely to be in the first quarter of next year, and its momentum in the second half of this year would be muted due to a lack of strong models.

“We have witnessed HTC conducting a series of cost-downs and restructuring in its R&D team recently to lift the bottom line,” he said. “However, amazing new models and market position are the key growth factors for the company.”

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