Fri, Mar 21, 2014 - Page 14 News List

HTC not convincing with new products, yet

By Kevin Chen  /  Staff reporter

Despite the warm reception its newly unveiled mid-range model received in China and the market hype surrounding the high-end products it is expected to launch in the West next week, HTC Corp (宏達電) has yet to inspire a positive outlook from JPMorgan Securities Ltd.

The brokerage said it is still too early to turn upbeat about the Taiwanese company because “multiple uncertainties” still loom over HTC.

In its latest research note on Wednesday, JPMorgan said that HTC’s product launches could lead to a sequential increase of between 40 and 50 percent in the company’s revenue next quarter, from a range of between NT$34 billion and NT$36 billion (US$1.11 billion and US$1.18 billion) that HTC forecast last month.

“However, any hopes of a turnaround are likely premature,” JPMorgan analysts Alvin Kwock (郭彥麟) and Michael Fan (范維綱) wrote in a note on Wednesday.

On Tuesday, BNP Paribas Securities predicted that the smartphone maker would see its sales next quarter grow by up to more than 50 percent from this quarter after local media reported that the number of preorders for HTC’s Desire 816 had risen to more than 1 million units in the first 10 days of sales in China.

Furthermore, HTC is expected to benefit from the launch of its new flagship model, dubbed the “M8,” set to hit markets in New York and London on Tuesday, BNP Paribas said in a note.

Kwock and Fan said they do not expect many innovative features on the M8, aside from the rumored “dual camera” function, adding that HTC’s rivals might catch up with the Desire 816 soon with their own mid-range product launches.

“Just like the challenge facing most other major [smartphone] brands face, HTC’s innovation curve has been slowing,” they wrote in the note, although they did say the firm has improved its production yield and might have 500,000 units on Tuesday.

JPMorgan kept its “underweight” rating for HTC shares and set a target price of NT$90 due to concerns about the phone vendor’s continuous operating losses this year. BNP set its target price at NT$94.

HTC shares closed down 0.68 percent at NT$147 on the Taiwan Stock Exchange yesterday.

The stock has risen 4.26 percent so far this year.

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