HTC says to tough out downturn, new models coming
TAIPEI (Reuters) – HTC Corp promised competitive new models early next year and said it would stick to its strategy in the face of its biggest challenge since rising to prominence in the smartphone market.
HTC has become the worst performer among global smartphone shares this year, falling over 30 percent in the last eight sessions alone, as investors worried it may have lost the innovative touch that propelled it from contract maker to must-have brand in only a few years.
Those concerns heightened last week when HTC surprisingly cut its revenue forecast for the fourth quarter to no growth, shocking a market used to double-digit growth rates from the maker of the Desire, Sensation and Wildfire models.
But the company says it is not another Nokia, the Finnish mobile maker which has experienced a rapid fall from market dominance.
“I don’t think it’s so serious,” Chief Financial Officer Winston Yungtold Reuters on Monday. “We have six quarters of improvement, the most conservative guidance is 45 million units of shipments this year, a lot higher than 25 million last year,” he said.
“We will focus on the product next year, better and more competitive. Other than new LTE phones for the U.S. market, we also have phones for the global market. We will launch some worldwide flagship products. We’re confident in them.”
On Monday, HTC shares opened down 1.3 percent before rising as much as 1 percent and then falling again as much 5 percent. At 0251 GMT, they were down 2.35 percent at T$478.
That is still way off their high for the year of T$1,238.1 in April, a figure that helped founder Cher Wang top the Forbes rich list for Taiwan this year.
“More foreign investors are still selling HTC as the company doesn’t have many bets in hand,” said Masterlink Investment Advisory vice president Tom Tang. “And unlike last time (when shares plunged), HTC didn’t make a share buyback plan this time,” he said.
Aside from stiff competition from Apple Inc’s iPhones and Samsung Electronics’ Galaxy line-up, HTC also faces legal challenges over patents from Apple and others.
German patent firm IPCom said on Friday it plans to halt as quickly as possible the sale of all HTC smartphones in Germany, after HTC pulled an appeal against the ruling.
HTC withdrew the appeal because the German Federal Patent Court had previously held the relevant claim of the patent in question to be invalid, the Taiwan firm said in a statement.
It added that the technology in question was old and no longer used by HTC, so that any move by IPCom would not affect sales.
(Reporting by Clare Jim; Writing by Jonathan Standing; Editing by Neil Fullick)