HTC Corp (宏達電), the world’s No. 5 smartphone brand, yesterday said revenue could shrink by as much as 23 percent sequentially to NT$70 billion (US$2.33 billion) this quarter because of a weak macroeconomy and stiff competition.
Sales would decline in all regions except China, a company executive told investors.
Overall revenue would slip to between NT$70 billion and NT$80 billion, from last quarter’s NT$91.04 billion, the company said.
Gross margin would slide to 25 percent this quarter from 27.01 percent in the prior quarter, because of falling prices and increased sales of lower-margin handsets in China. Operating margin would also drop to 7 percent from 9 percent, it said.
“We saw growth in China, but declines in varying degrees in other regions,” HTC chief financial officer Chang Chia-lin (張嘉臨) told investors yesterday. “Specifically, we saw challenges in EMEA [Europe, the Middle East and Africa].”
Chang attributed the revenue drop to “overall macroeconomic softness and fierce competition.”
Last quarter, HTC’s net profit plunged 57.8 percent year-on-year to NT$7.4 billion, from NT$17.52 billion, the company said early last month. However, on a quarterly basis, its net income jumped 65.7 percent from the first quarter’s NT$4.47 billion.
Chang said HTC would continue to develop innovative products and strengthen its competitiveness through its strong partnerships with telecoms operators and distribution channels.
Asked about the company’s move to downsize its overseas research and development centers and sales offices, Chang said it was not a move to cut costs, but was rather a part of an ongoing organizational optimization.
“HTC is now very focused on allocating the right resources and human capital to focus on key growth areas, which is not limited to China and emerging markets, but also developed countries, where we need to develop deeper brand awareness,” Chang said.
“With growing brand awareness, strong operator partnerships and increasing retail presence, China is well positioned to become a key growth driver,” an HTC statement said.
Chang also commented on HTC selling back nearly half of its stake in high-end headphone maker Beats Electronics LLC.
“We think Beats’ founding members and the management team have the vision and managerial expertise to lead the company to become a successful global brand, which would increase its share value, and HTC, as a 25 percent shareholder, will benefit tremendously. We want to give them more flexibility to take Beats to the next level,” he said.
The smartphone maker also announced that Mike Woodward, a former vice president of AT&T’s consumer wireless devices division, had been appointed president of its North American division, taking charge of the company’s sales, marketing and operations for the US and Canadian markets.
Elon Musk’s lieutenants have reached out to chip industry suppliers, including Applied Materials Inc, Tokyo Electron Ltd and Lam Research Corp, for his envisioned Terafab, early steps in an audacious and likely arduous attempt to break into the production of cutting-edge chips. Staff working for the joint venture between Tesla Inc and Space Exploration Technologies Corp (SpaceX) have sought price quotes and delivery times for an array of chipmaking gear, people familiar with the matter said. In past weeks, they’ve contacted makers of photomasks, substrates, etchers, depositors, cleaning devices, testers and other tools, according to the people, who asked not to
The EU and US are nearing an agreement to coordinate on producing and securing critical minerals, part of a push to break reliance on Chinese supplies. The potential deal would create incentives, such as minimum prices, that could advantage non-Chinese suppliers, according to a draft of an “action plan” seen by Bloomberg. The EU and US would also cooperate on standards, investments and joint projects, as well as coordinate on any supply disruptions by countries like China. The two sides are additionally seeking other “like-minded partners” to join a multicountry accord to help create these new critical mineral supply chains, which feed into
Japan approved ￥631.5 billion (US$3.97 billion) in additional subsidies to hasten Rapidus Corp’s entry into the high-stakes artificial intelligence (AI) chipmaking arena, ramping up support for a project widely regarded as a long shot. The capital is intended to bankroll Rapidus’ work for information technology firm Fujitsu Ltd, one of the initial customers that Tokyo hopes would get the signature endeavor off the ground. The new money raises the fees and investments that the government is injecting into the start-up to ￥2.6 trillion by the end of the current fiscal year to March next year, the Japanese Ministry of Economy, Trade and
The founder of Chinese property giant Evergrande Group (恆大集團) has pleaded guilty to charges of fraud and bribery, a court said yesterday, the latest blow for what was once the country’s leading developer. Evergrande’s rise was propelled by decades of rapid urbanization and rising living standards, but in 2020, its access to credit dramatically narrowed when the government introduced curbs on excessive borrowing and speculation. The company defaulted in 2021 after struggling to repay creditors. Founder Xu Jiayin (許家印), 67, known as Hui Ka Yan in Cantonese, was reportedly held by police in 2023, with Evergrande saying he had been subjected to
RSS