HTC eyes 43% sales jump

AMERICAN POTENTIAL: The handset maker hopes to increase sales to 10 million units, a rise based on a hike in sales in the US market as Europe's proportion falls


Tue, Aug 29, 2006 - Page 11

High Tech Computer Corp (HTC, 宏達電), the world's largest maker of handsets based on Microsoft Corp's Windows operating system, expects its shipments to gain 43 percent to more than 10 million units this year on rising sales to the US.

"We think the US market for Windows-based phones" has much more room to grow, HTC president Peter Chou (周永明) said at a media briefing yesterday.

Taoyuan-based HTC shipped 7 million mobile devices last year, including personal digital assistants and cellphones.

HTC is supplying more handsets to US phone operators, including Cingular Wireless LLC, Verizon Communications Inc and Sprint Nextel Corp, after doubling revenue last year via sales to companies in Europe, its biggest market. HTC is also buying a controlling stake in Dopod International Corp (多普達) in order to expand sales of Windows-based handsets.

"In the US, operators have 90 percent of the market" for handset sales, Chou said. "So if you want to do business you need to work with them."

The company expects the proportion of sales from the US to triple to 30 percent this year from less than 10 percent last year.


The share from Europe is forecast to drop to 40 percent from about 50 percent to 60 percent last year, Chou said.

HTC's share of the market for Windows-based cellphones is around 60 percent to 70 percent, Chou said.

The company expects spending on research and development to expand to US$100 million from US$84 million last year.

HTC tripled net income to NT$11.8 billion (US$358 million) last year, while sales rose to NT$73.1 billion from NT$36.4 billion. The company is scheduled to report second-quarter earnings by Thursday.

Shares of HTC fell 2.1 percent to NT$790 in Taipei, compared with a 1.3 percent decline in the benchmark TAIEX index.

The stock has gained 54 percent this year.

On June 2, HTC agreed to buy a controlling stake in cellphone maker Dopod. HTC currently produces phones for Dopod and is the company's sole supplier, Chou said.

"We would like to have Dopod focus on Asia," which accounts for around 30 percent of HTC's sales, Chou said.

Dopod is 90 percent owned by HTC chairwoman Cher Wang's (王雪紅) nephew, Timothy Chen (陳主望), who is also the Taipei-based company's chairman.


Cher Wang is HTC's largest shareholder with a stake of more than 20 percent, Chou said.

Wang is Taiwan's richest woman according to Forbes magazine, and is the daughter of Taiwan's richest man, Wang Yung-ching (王永慶), founder of Formosa Plastics Group (台塑集團).

"Even though I have a very rich boss, I try very hard to operate independently" of the family company, Chou said.

HTC also works independently of its largest partner, Microsoft, and has not committed to a Windows-only business model, Chou said.

The company has no plans for the moment to develop phones based on the rival Symbian operating system.

But HTC is open to the idea, he said.