HTC posts a lower-than-ex­pected Q2 rev­enue fore­cast

HTC plan­ning a mid-range phone for In­dian buy­ers

The China Post - - TAIWAN BUSINESS -

Tai­wanese smart­phone maker HTC Corp. ( ) gave a fore­cast for sec­ond quar­ter rev­enues on Tues­day that came in lower than ex­pected de­spite the launch of its flag­ship One M9 phone in March.

The Taoyuan-based com­pany pro­jected rev­enues of NT$46 bil­lion (US$1.5 bil­lion) to NT$51 bil­lion for the April-June quar­ter of 2015, with earn­ings per share of NT$0.06 to NT$0.34.

That would rep­re­sent quar­terly growth of 10.8 per­cent to 22.9 per­cent, lower than the av­er­age 50 per­cent growth es­ti­mated by an­a­lysts.

The com­pany fore­cast its gross profit mar­gin for the quar­ter at 23 per­cent to 23.5 per­cent, which would be an in­crease from 19.7 per­cent in the first quar­ter.

HTC turned in an­other prof­itable quar­ter for the first three months of 2015, when its rev­enue grew 25 per­cent from the pre­vi­ous year to NT$41.5 bil­lion. Earn­ings per share also re­bounded to NT$0.43.

The flag­ship HTC One M9 was un­veiled March 1 at the Mo­bile World Congress show, while the HTC One M9+ with a larger screen was in­tro­duced in early April in spe­cific emerg­ing mar­kets in­clud­ing China.

HTC also reshuf­fled its man­age­ment at the end of the first quar­ter to put more of a pri­or­ity on con­nected smart de­vices.

HTC co-founder and chair­woman Cher Wang ( ) was ap­pointed chief ex­ec­u­tive of­fi­cer, and for­mer CEO Peter Chou was ap­pointed head of HTC Fu­ture Labs.

Ac­cord­ing to the com­pany, the move freed up Chou to fo­cus on new prod­uct ar­eas that could cre­ate new rev­enue streams and broader brand pen­e­tra­tion for HTC in the fu­ture.

“We have con­tin­ued to raise our game over the last few months, and the Q1 re­sults re­flect the hard work we have put into con­sol­i­dat­ing our pro­cesses and op­er­a­tions, while en­hanc­ing our core fo­cus of Tai­wan’s HTC Corp. ( ) said Tues­day that it plans to launch a mid-range hand­set spe­cially de­signed for In­dian con­sumers in the third quar­ter of 2015 to ex­pand its pres­ence in the world’s third-largest smart­phone mar­ket.

“We’re go­ing to launch a prod­uct that will fit the coun­try’s wire­less net­work, which in­cludes CDMA and WCDMA stan­dards,” said Chang Chia-lin, pres­i­dent of global sales and chief fi­nan­cial of­fi­cer at HTC.

The new hand­set will be a model of HTC’s mid-tier De­sire su­perla­tive de­sign and tech­nol­ogy for the mo­bile life­style,” Wang said in state­ment.

“More im­por­tant, we have made strides in ex­pand­ing our prod­uct of­fer­ings into new con­nected smart se­ries, Chang told a press brief­ing af­ter the com­pany’s earn­ings con­fer­ence call with an­a­lysts.

HTC is also eval­u­at­ing the pos­si­bil­ity of start­ing hand­set as­sem­bly in In­dia with lo­cal man­u­fac­tur­ing part­ners to re­duce costs, but it would be pre­ma­ture to give a timetable for this plan, he said.

“Even­tu­ally we hope our brand will take root in In­dia in the long term. But it’s com­pli­cated when it comes to set­ting up a man­u­fac­tur­ing fa­cil­ity there,” Chang said.

His re­marks came just days af­ter Chi­nese phone maker Xiaomi Inc. ( ) an­nounced its de­vices in ar­eas such as fit­ness and en­ter­tain­ment,” she said.

“Just as HTC pi­o­neered the smart­phone mar­ket, it is vi­tal that we drive the con­nected life­style through our pur­suit of bril­liance first made-for-In­dia smart­phone, the Mi4i, to cater to the “Make in In­dia” ini­tia­tive that has been pro­moted by In­dian Prime Min­is­ter Naren­dra Modi since Septem­ber 2014 to make the coun­try a man­u­fac­tur­ing hub.

To sup­port lo­cal man­u­fac­tur­ing, the In­dian gov­ern­ment has taken steps that will make im­port­ing hand­sets more ex­pen­sive, with Xiaomi, Tai­wan’s Asustek Com­puter Inc. ( ) and South Korea’s Sam­sung Elec­tron­ics Co. al­ready show­ing in­ter­est in man­u­fac­tur­ing phones in In­dia, ac­cord­ing to In­dian me­dia re­ports. and by en­gag­ing strate­gic part­ners to bring the best and most in­no­va­tive prod­ucts to mar­ket.”

HTC shares ended down 1.13 per­cent at NT$131.5 on Tues­day in Taipei.

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