Tue, Aug 07, 2012 - Page 13 News List

Heavy competition drives down HTC sales by 44.5%

GOT THE WRONG NUMBER:The Taiwanese firm has seen its share of the lucrative, but competitive, market tumble with rivals Apple and Samsung blazing the way

By Kevin Chen  /  Staff reporter

Smartphone maker HTC Corp (宏達電) yesterday reported that sales last month fell 44.53 percent from a year earlier and that accumulated sales in the first seven months of the year dropped 32.83 percent from the year before, a company release said.

HTC said its sales last month reached NT$25.03 billion (US$835.3 million), compared with NT$45.11 billion a year ago.

On a monthly basis, sales were 16.6 percent less than the NT$30 billion it made in June, as the company’s One series smartphones faced fierce competition from Apple Inc’s iPhone 4S and Samsung Electronics Co’s Galaxy S III.

During the January-July period, revenue totaled NT$183.85 billion, down from NT$273.67 billion in the same period last year, the release showed.

The latest figures came after the company, the world’s No. 5 smartphone brand, said last week that it would experience a weak third quarter.

HTC said on Friday it expected revenue to shrink to NT$70 billion to NT$80 billion this quarter, representing a drop of 41 percent to 48 percent from NT$135.8 billion a year earlier, or down 12 percent to 23 percent from NT$91.04 billion in the second quarter, because of a weak macroeconomy and stiff competition.

Gross margin would slide to 25 percent this quarter from 27.01 percent in the prior quarter, because of falling product prices and a change in its product mix, while operating margin would drop to 7 percent from 9 percent, HTC said on Friday.

“HTC’s [forecast] sequential sales decline of 12 percent to 23 percent is lower than market forecast of a fall of 5 percent to 10 percent and its guidance for both gross margin and operating margin are also weaker than market expectations,” Grand Cathay Investment Services Corp (大華投顧) analyst Vincent Lin (林致全) said in a note yesterday.

HTC sales slide

‧ The Taiwanese smartphone maker said last month’s sales reached NT$25.03 billion, compared with NT$45.11 billion a year ago.

‧ The company is the world’s No. 5 smartphone brand.

‧ The high-tech firm said last week that it would experience a weak third quarter.

‧ The struggling firm is facing mounting competition from Samsung’s Galaxy S III and Apple’s iPhone 4S.


As HTC has no major product launch in the pipeline this quarter, but is expected to continue facing competition from Samsung’s Galaxy Note 2 and Apple’s iPhone 5 in the second half of the year, Lin said he expected the company’s full-year revenue to drop 32.05 percent to NT$316.52 billion this year from NT$465.8 billion last year, with a gross margin of 25.7 percent and an operating margin of 8.07 percent.

Last year, HTC reported a gross margin of 28.3 percent and an operating margin of 14.77 percent.

Earnings per share are likely to fall 63.19 percent to NT$26.99 this year from NT$73.32 last year, Lin said.

Shares in HTC fell by its daily limit to NT$258.50 in Taipei trading yesterday, ahead of the release of last month’s sales figures. The stock has dropped 44.16 percent so far this year.

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