HTC banks on new products to regain market
Taiwanese smartphone maker fights back after first quarterly loss and plunge in stock value
Taiwanese smartphone maker HTC, which posted a first quarterly loss last week, says the next two months will be its "biggest challenge" as it tries to win sales from Apple and Samsung Electronics.
"We really have the best technology and the best product," chairman Cher Wang said on Saturday while attending the Asia-Pacific Economic Co-operation conference in Bali, Indonesia.
HTC stock has slumped this year as the company's share of the global smartphone market dropped by more than half in the second quarter.
Once the biggest seller in the United States, HTC plans redesigned versions of its flagship HTC One model and has hired actor Robert Downey Jr in a renewed push to promote its brand.
The stock fell 6.7 per cent to NT$126 (HK$33.25) yesterday and has dropped 58 per cent this year, compared with an 8.2 per cent advance in the benchmark market index.
The company is valued at about US$3.7 billion, compared with US$37 billion at its peak.
Amid growing pressure from Samsung and Apple at the high end and mainland manufacturers among less expensive handsets, HTC's share of the global smartphone market shrank to 2.8 per cent in the second quarter from 5.8 per cent a year earlier.
"We don't see a turnaround in the near future," said Richard Ko, an analyst at KGI Securities. "Its products aren't good enough to compete, and those in the pipeline aren't going to rescue the business either."
Goldman Sachs cut its price target to NT$80 from NT$86 yesterday after the company last week reported its first quarterly loss of NT$2.97 billion for the third quarter of the year.
"Our communication does have a problem but we are improving on that," Wang said. "It's a gap between our new products coming out and we are improving our innovation and our marketing."
HTC is pinning its hopes on new products, including models that build on the HTC One franchise, to halt declining sales. The company's HTC One mini, which went on sale in August, features a 4.3-inch display and a more slender design.
Samsung and Apple dominate the global smartphone market with a combined 43.5 per cent share in the second quarter, according to IDC data in July.
The slump in its share price could make HTC a takeover target for mainland rivals including Lenovo and Huawei Technologies.