HTC posts a lower-than-expected Q2 revenue forecast
HTC planning a mid-range phone for Indian buyers
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.