HTC Corp (宏達電) plans to introduce fewer, but potentially more profitable, smartphones this year, after its net loss expanded sequentially last quarter, a company executive said yesterday.
“We want to do something different this year. Our intention is to introduce a maximum of six to seven models,” HTC president of smartphone and connected devices business Chang Chia-lin (張嘉臨) told a teleconference.
The company launched more than 10 smartphones worldwide last year, ranging from low to high-priced models.
Chang said it is more important for the company to make a profit in the smartphone business rather than increase handset shipments through numerous model launches.
The company’s strategy is to introduce one higher-end “hero product” with unique features each quarter, while withdrawing from the lower-priced market because the segment is overly competitive, Chang said.
HTC’s latest U Ultra series smartphones, unveiled in Taiwan last month, are expected to begin mass production and enter European, Southeast Asian and Chinese markets later this month.
The company expects sales of the U Ultra series to help its gross margin improve sequentially this quarter, he said, without elaborating.
Chang declined to disclose the revenue contribution or gross margin of HTC’s virtual-reality (VR) business.
He only said that the sales momentum of Vive headsets would remain strong this year.
HTC remains optimistic about the outlook of the VR industry and will continue to invest resources in building a complete ecosystem with rich content to attract consumers, Chang said.
The company has been building up its VR business and improving cost control over the past two years to help offset a weak and shrinking smartphone business, he said.
The company’s latest financial results showed that its net losses expanded to NT$3.1 billion (US$100.43 million) last quarter from NT$1.78 billion a quarter earlier.
Its loss per share reached NT$3.77, compared with the previous quarter’s NT$2.18, company data showed.
HTC’s gross margin dropped 5.57 percentage points to 10.5 percent last quarter from the prior quarter’s 16.07 percent, while its operating margin slid to minus-16 percent from minus-7.02 percent over the same period, the data showed.
Chang did not elaborate on the results, only saying that the company had inventory management and “some other” issues last quarter.
Net losses for last year totaled NT$10.56 billion, down from the previous year’s NT$18.79 billion. Loss per share was NT$12.82, data showed.