HTC Corp (宏達電), the manufacturer of the world’s first phone running Google’s Android system, yesterday posted a 31 percent decline in revenues for the fourth quarter amid rising operating costs.
Last quarter’s net income dropped to NT$5.58 billion (US$175 million), compared with a revised profit of NT$8.09 billion a year earlier, HTC said in a statement. That figure also represented a 2 percent drop quarter-on-quarter.
Revenues dropped 13 percent to NT$41.08 billion in the fourth quarter, from NT$47.38 billion a year ago, meeting the company’s earlier forecast of between NT$40 billion and NT$42 billion.
For the whole year, net profit shrank 21 percent to NT$22.65 billion from NT$28.64 billion in 2008. Revenue fell 5 percent to NT$144.88 billion from NT$152.56 billion in the previous year, said HTC, which is scheduled to give its quarterly outlook during a teleconference with investors on Jan. 26.
“HTC released better-than-expected revenues, but its earnings do not match the pace. This means that the company may spend more on marketing its branded phones than it disclosed,” Lu Chia-lin (呂家霖), who tracks the handset industry for Macquarie Securities, said by telephone yesterday.
In November, Taoyuan-based HTC said it would allocate a bigger share of its revenues — as much as 17.5 percent — to promote its smartphones amid growing competition, compared with 14 percent in the third quarter last year and 11.5 percent in the final quarter of 2008.
New orders from Google Inc and US telecoms operator Verizon Wireless could be the major driving force behind HTC’s strong sales last month, Lu said.
“HTC has began shipping Nexus One to Google last month. We believe the partnership will have a positive impact on HTC, as the gross margin is not bad,” Lu said.
HTC could ship about 2 million Nexus One phones to Google this year as the online search giant seeks to boost sales through a new online shopping service.
Citigroup analyst Kevin Chang (張凱偉), however, was more cautious about Google’s move in the handset sector.
It would be “impossible for HTC to make 30 percent gross margin” with Nexus One, Chang said in a report yesterday.
HTC financial executive officer Cheng Hui-ming (鄭慧明) told Bloomberg yesterday that the phone would have a profit margin similar to that of HTC’s branded devices.
Google’s new phone could cause a severe blow to HTC’s current models, most of which retail for more than US$550. The Google Nexus One is sold for US$529 without telecoms services, or starting at US$179 with a two-year service contract, Chang said.
Shares of HTC inched up 0.4 percent yesterday to NT$373.5, underperforming the benchmark TAIEX, which gained 1.42 percent.
MOVING ON UP: Taiwan improved in all four areas measured by the IMD, making its biggest leap, from 17th to sixth place, in economic performance Taiwan moved up three spots from last year to place eighth, its best performance since 2013, in the latest annual world competitiveness rankings, released yesterday by the International Institute for Management Development (IMD). Innovation, digitalization, welfare benefits and social cohesion are critical to economic performance, with Switzerland, Sweden, Denmark, the Netherlands and Singapore making up the top five on the list this year, the Switzerland-based institute said, after grading 64 countries and regions based on economic performance, infrastructure, and government and business efficiency. “Leading performers are characterized by varying degrees of investment in innovation, diversified economic activities and supportive public policy,” IMD
With the US opening up to travel, demand in Taiwan for US-bound flights has soared, pushing up ticket prices to most destinations in North America, tourism sources said. Fares for destinations in the US have risen dramatically since the middle of last month, and the trend is expected to continue in the coming months, as California on Tuesday lifted most social distancing and capacity limits put in place to contain the spread of COVID-19, ezTravel Co (易遊網) said in a statement yesterday. The travel agency forecast that the number of tickets sold this month is likely to be double or triple
‘MATTER OF SURVIVAL’: Vice Premier Liu He is to lead the development of ‘third-generation’ chips, a field not yet dominated by any nation or company Chinese President Xi Jinping (習近平) is renewing his years-long push to achieve technology self-sufficiency by tapping a top deputy to shepherd a key initiative aimed at helping domestic chipmakers overcome US sanctions. Chinese Vice Premier Liu He (劉鶴), Xi’s economic czar whose sprawling portfolio spans trade to finance and technology, has been tapped to spearhead the development of so-called “third-generation” chip development and capabilities, and is leading the formulation of a series of financial and policy supports for the technology, people with knowledge of the matter said. It is a nascent field that relies on newer materials and gear beyond traditional silicon,
OPPORTUNITY: The company aims to sell its product soon, as enterovirus vaccines are not available anywhere but China, where firms are only marketing their vaccines locally Medigen Vaccine Biologics Corp’s (高端疫苗) phase 3 clinical trials for an enterovirus 71 (EV71) vaccine completed the multi-regional, multi-central data “unblinding” yesterday, with the results, including safety, immunogenicity and efficacy, meeting its expectations. The company would compile a final analysis report as soon as possible, and apply for the new drug certificate from domestic and foreign drug authorities in the third quarter, Medigen said in a Taiwan Stock Exchange filing yesterday. Its phase 3 trials were conducted in Taiwan and Vietnam with 3,049 participants ranging from two months old to six years old, Medigen said. The company enrolled its first participant for