HTC Corp (宏達電) plans to sell all of its shares in UK-based Saffron Media Group Ltd as the smartphone maker aims to better utilize its assets and resources in an increasingly difficult market.
Facing stronger competition in both developed and emerging markets, HTC saw its ranking fall out of the world’s top 10 during the first half of the year, according to data compiled by International Data Corp (IDC) and Gartner Inc.
The Taiwanese firm said CDMG Holdings UK Ltd of Cinram Group Inc, one of the world’s largest providers of CDs and DVDs, would buy its 1.6 billion shares in Saffron Media for US$47 million.
Under the terms of the contract, HTC will receive US$7.5 million in cash from Cinram and US$39.5 million in five-year corporate bonds, at a 6 percent annual yield, from CDMG Holdings, the company said in a filing to the Taiwan Stock Exchange on Wednesday.
The company said it would book a profit of NT$156.94 million (US$5.29 million) from the deal. After the share sale, HTC will still own permanent royalty-free rights to Saffron’s intellectual property to continue digital media services on its devices, including the HTC Watch, it added.
In a bid to branch into the mobile entertainment market, in February 2011 HTC invested in Saffron, which provides products and services in 14 languages and 26 countries.
Shares of HTC closed down 4.73 percent at NT$131 yesterday, underperforming the benchmark TAIEX, which gained 1.06 percent, and representing a record low level in the company’s history.
Separately, IDC yesterday said the worldwide mobile phone market was forecast to grow 7.3 percent this year, up from its previous projection of 5.8 percent growth for the year, because of higher global smartphone shipments during the first half of the year, driven by strong gains in emerging markets and the sub-US$200 smartphone segment.
Global smartphone shipments are forecast to grow 40 percent year-on-year to more than 1 billion units this year and reach 1.7 billion units in 2017, IDC said.