Mon, Sep 24, 2012 - Page 13 News List

HTC’s new phones not ‘game changers’: analysts

Staff writer, with CNA

Taiwan’s HTC Corp (宏達電) last week launched two smartphones powered by Microsoft Corp’s Windows 8 software, but the new models might not be greatly appealing to consumers, Japanese brokerage Nomura Holdings Inc said.

HTC unveiled its first Windows Phone 8 (WP8) smartphones — the 4.3-inch HTC 8X and the 4-inch HTC 8S — in New York on Wednesday. The phones feature Beats audio technology and improved camera capabilities.

HTC and Microsoft said they will promote the two new devices jointly as “signature” Windows phones, which will go on sale in November through more than 150 carriers in over 50 countries.

“HTC’s phone design looks attractive, in our view,” said Aaron Jeng (鄭明宗), a Taipei-based analyst at Nomura. “The multiple colors could be attractive to the young generation. However, their features are not as attractive as their looks.”

Surprisingly, the specifications of HTC’s WP8 phones are more mid than high-range, he said in a research note dated on Friday. This suggests a “likely worsening product mix if the sales volume of these models picks up,” he added.

Moreover, Jeng said, the WP8 market will likely be small, given its weak ecosystem with few apps and the “mediocre demand” for the PC experience on handsets. For example, the Microsoft Office software that is popular on desktop PCs and laptops is not a key application for handset users, he said.

HTC, being squeezed by rivals Samsung Electronics Co and Apple Inc in the high-end smartphone market, is trying to diversify risks by shifting its focus from Google Inc’s Android system to the Windows mobile platform. However, the Taoyuan-based company still needs to compete against three other WP8 handset makers — Samsung, Nokia Oyj and Huawei Technologies Co (華為), which are also partnering with Microsoft to produce the first wave of WP8 phones.

South Korea’s Samsung showcased the world’s first WP8, the Ativ S, at the IFA consumer electronics show in Germany on Aug. 31. The device is equipped with a 4.8-inch AMOLED display and an 8-megapixel rear camera. Finnish maker Nokia launched its WP8-based Lumia 920 on Sept. 7, with emphasis on its powerful “PureView” camera and built-in wireless charging. Meanwhile, China’s Huawei is scheduled to release its new WP8 model “Ascend W1” tomorrow, media reports said.

“Overall, we think Samsung’s Ativ S is the most outstanding among the WP8 smartphones in terms of hardware specifications,” Jeng said.

Nomura maintained a “reduce” rating on HTC and kept its target price of NT$200. HTC shares climbed 3.59 percent on Friday in Taipei to close at NT$317.

Richard Ko, an analyst at KGI Securities (凱基證券) in Taipei, said he believes HTC’s WP8 smartphones will not become a game changer for the company. He said competition in the smartphone market remains intense across all segments, and Apple and Samsung will continue to lead in terms of brand, distribution channel, scale and cost. Ko forecast that Apple’s iPhone 5 and Samsung’s Galaxy series would limit HTC’s shipment growth in the fourth quarter.

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