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.
Stephen Garrett, a 27-year-old graduate student, always thought he would study in China, but first the country’s restrictive COVID-19 policies made it nearly impossible and now he has other concerns. The cost is one deterrent, but Garrett is more worried about restrictions on academic freedom and the personal risk of being stranded in China. He is not alone. Only about 700 American students are studying at Chinese universities, down from a peak of nearly 25,000 a decade ago, while there are nearly 300,000 Chinese students at US schools. Some young Americans are discouraged from investing their time in China by what they see
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
MAJOR DROP: CEO Tim Cook, who is visiting Hanoi, pledged the firm was committed to Vietnam after its smartphone shipments declined 9.6% annually in the first quarter Apple Inc yesterday said it would increase spending on suppliers in Vietnam, a key production hub, as CEO Tim Cook arrived in the country for a two-day visit. The iPhone maker announced the news in a statement on its Web site, but gave no details of how much it would spend or where the money would go. Cook is expected to meet programmers, content creators and students during his visit, online newspaper VnExpress reported. The visit comes as US President Joe Biden’s administration seeks to ramp up Vietnam’s role in the global tech supply chain to reduce the US’ dependence on China. Images on
New apartments in Taiwan’s major cities are getting smaller, while old apartments are increasingly occupied by older people, many of whom live alone, government data showed. The phenomenon has to do with sharpening unaffordable property prices and an aging population, property brokers said. Apartments with one bedroom that are two years old or older have gained a noticeable presence in the nation’s six special municipalities as well as Hsinchu county and city in the past five years, Evertrust Rehouse Co (永慶房產集團) found, citing data from the government’s real-price transaction platform. In Taipei, apartments with one bedroom accounted for 19 percent of deals last