The challenges facing HTC Corp (宏達電) are greater than just reinvigorating its brand image.
Poised to start selling its new flagship model at the end of this month as it tries to regain a foothold in the competitive smartphone business, the Taiwanese company said on Monday that pre-orders for the new HTC One had already surpassed sales of all its previous models on the local market, including the popular HTC Butterfly.
However, analysts said a shortage of components used in the latest model has made investors concerned about HTC’s sales outlook this quarter and its ability to cut deals with key component suppliers.
There are also worries that delayed shipments of the new product might expose it to more competition from Samsung Electronics Co’s newest flagship model, the Galaxy S4, which was launched on Thursday last week in New York, they added.
“Internally and externally, HTC is faced with more threats, but they are challenges it expects to see and confront,” Hua Nan Securities Co (華南永昌投顧) chairman David Chu (儲祥生) told the Taipei Times by telephone yesterday. “The smartphone market is getting more competitive. Only those with lots of financial resources can play the game.”
HTC has vowed to stage a comeback by adopting fresh business strategies and increasing its marketing resources this year, after posting record low net profits of NT$3.9 billion (US$131.07 million) and NT$1 billion in the third and fourth quarters of last year respectively.
Chu said the company’s marketing costs of about US$46 million last year were substantially smaller than the US$14 billion spent by Samsung and the US$1 billion spent by Apple Inc. Chu referred to the spending as a “resource game between corporate groups.”
Last week, the Taoyuan-based company confirmed that shipments of the new HTC One would be delayed in certain markets, following market speculation that the firm is facing shortages of voice coil motors and compact camera modules due to low yield rates.
“HTC needs to secure support from supply chain partners,” Chu said.
According to International Data Corp’s statistics, Samsung’s shipments expanded 129.1 percent to 215.8 million units last year with a market share of 30.3 percent, while Apple’s shipments grew 46.9 percent to 135.9 million units with a market share of 19.1 percent.
In comparison, HTC’s shipments contracted 25.2 percent to 32.6 million units last year and the company held a market share of 4.6 percent.
To regain the market share lost to Samsung and Apple, Chu said that HTC needs to offer products with more functions and competitive price tags.
However, another analyst believes the number of flagship models is another issue for HTC.
“Samsung rolls out a new flagship product once a year, but HTC last year rolled out more than three products [the HTC One series, HTC 8X and 8S Windows phones and the HTC Butterfly series], which confused customers about which is the best one and therefore lowered their brand loyalty,” Taipei-based Fubon Securities Co (富邦證券) analyst Arthur Liao (廖顯毅) said.
Liao said HTC’s current problem is not Samsung, but itself.
“If HTC could improve its product yield rate and avoid delaying shipments this time, the new HTC One might change its fate,” he said.
Challenges are also arising in emerging markets, where HTC is facing an increasing number of rivals in the low-end segment.
For instance, in China the company is competing with Lenovo Group Ltd (聯想), Yulong Computer Telecommunication Scientific (Shenzhen) Co (宇龍通信), Huawei Technologies Co (華為) and ZTE Corp (中興), which collectively hold a 70 percent share in China’s smartphone market, analysts said.
Taiwan Transport and Storage Corp (TTS, 台灣通運倉儲) yesterday unveiled its first electric tractor unit — manufactured by Volvo Trucks — in a ceremony in Taipei, and said the unit would soon be used to transport cement produced by Taiwan Cement Corp (TCC, 台灣水泥). Both TTS and TCC belong to TCC International Holdings Ltd (台泥國際集團). With the electric tractor unit, the Taipei-based cement firm would become the first in Taiwan to use electric vehicles to transport construction materials. TTS chairman Koo Kung-yi (辜公怡), Volvo Trucks vice president of sales and marketing Johan Selven, TCC president Roman Cheng (程耀輝) and Taikoo Motors Group
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
RECORD-BREAKING: TSMC’s net profit last quarter beat market expectations by expanding 8.9% and it was the best first-quarter profit in the chipmaker’s history Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), which counts Nvidia Corp as a key customer, yesterday said that artificial intelligence (AI) server chip revenue is set to more than double this year from last year amid rising demand. The chipmaker expects the growth momentum to continue in the next five years with an annual compound growth rate of 50 percent, TSMC chief executive officer C.C. Wei (魏哲家) told investors yesterday. By 2028, AI chips’ contribution to revenue would climb to about 20 percent from a percentage in the low teens, Wei said. “Almost all the AI innovators are working with TSMC to address the
FUTURE PLANS: Although the electric vehicle market is getting more competitive, Hon Hai would stick to its goal of seizing a 5 percent share globally, Young Liu said Hon Hai Precision Industry Co (鴻海精密), a major iPhone assembler and supplier of artificial intelligence (AI) servers powered by Nvidia Corp’s chips, yesterday said it has introduced a rotating chief executive structure as part of the company’s efforts to cultivate future leaders and to enhance corporate governance. The 50-year-old contract electronics maker reported sizable revenue of NT$6.16 trillion (US$189.67 billion) last year. Hon Hai, also known as Foxconn Technology Group (富士康科技集團), has been under the control of one man almost since its inception. A rotating CEO system is a rarity among Taiwanese businesses. Hon Hai has given leaders of the company’s six