Tue, Dec 03, 2013 - Page 13 News List

HTC breaks 25-month sales slide with One Max

By Helen Ku  /  Staff reporter

Smartphone vendor HTC Corp (宏達電) yesterday said its sales rose 3.17 percent month-on-month to NT$15.47 billion (US$522 million) last month after the company began selling its new 5.9-inch One Max phablet.

However, last month’s sales were 27.12 percent lower than the NT$21.22 billion of a year ago. HTC had posted annual drops in monthly sales for 25 straight months since October, 2011.

Cumulative sales during the first 11 months of the year fell 2.86 percent to NT$190.96 billion from NT$267.45 billion during the same period last year, HTC said.

“The figure [HTC’s sales last month] falls in an acceptable range of between NT$15 billion and NT$16 billion, and that means the company is gearing up to bring out real changes,” Yuanta Securities Corp (元大證券) analyst Dennis Chan (詹宗勳) said by telephone yesterday.

With sales of NT$14.99 billion in October and NT$15.47 billion for last month, the Taoyuan-based firm is likely to see its quarterly sales exceed its guidance of between NT$40 billion and NT$45 billion, Chan said.

MID-TIER

HTC recently launched mid-tier products to penetrate into emerging markets like China, but Chan said the firm can “hardly make a comeback” because newcomers like China-based Huawei (華為), ZTE Corp (中興), Xiaomi (小米) and Coolpad (酷派) have more extensive sales channels in their home market.

While reducing operating costs by closing assembly lines, HTC should also consider adding marketing expense to strengthen its presence in China,” he said.

However, Mega Investment Trust Co (兆豐國際投信) analyst Kevin Hsu (許鈞雄) said that HTC should most urgently consider using chip designer MediaTek Inc’s (聯發科) chipsets for its new products to reduce costs.

“In China, consumers are M-shaped, with a group of people looking for luxury smartphones made by Apple [Inc] and a group of people searching for compact but cheap smartphones,” Hsu said.

Therefore, the company should approach the lower-end smartphone market in China and sell products that are less expensive than those made by Huawei, ZTE, Xiaomi and Coolpad, he said.

“It may sound impractical, but that is the reality HTC has to face if it wants to make a turnaround in the Chinese market,” Hsu said.

“There is still a chance for HTC to post profits by selling low-end smartphones, but that will only be possible if the company changes its selection of components,” he added.

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