Phone maker HTC is facing tough future
TAIWANESE smartphone maker HTC has yet to catch up with market dominators Apple and Samsung, posting expectations of a weak quarter ahead despite strong growth in fiscal 2011.
The world’s number five smartphone maker said it expects revenues of 65bn Taiwanese dollars (£1.4bn) in the first three months of this year, down from T$101.42bn in the previous quarter.
In fiscal 2011, HTC pocketed profits of T$61.98bn – up 57 per cent year on year – after a 67 per cent jump in revenues to T$465.79bn.
And profit margins at the smartphone company continue to decline, with operating margins reaching just 12.7 per cent last quarter and expected to hit 7.5 per cent in the coming period.
HTC called this trend a “temporary phenomenon” and said the margins will normalise when product cycle transition is over.
HTC, whose smartphones operate on Android, is expected to release four new handset models later this month in a bid to catch up with market rivals Apple, which shipped 37m iPhones last quarter, and Samsung, which followed closely behind with its Galaxy range.
By comparison, HTC yesterday reported a 52.6 per cent drop in January sales from a year earlier, bringing in T$16.62bn.
Shares in the Taiwanese company more than tripled in the year to April 2011 before spending the rest of the year in decline.
The stock dropped 5.2 per cent to T$551 yesterday.