HTC eyes US with flagship M8 phone

Taiwan firm looks to regain lost market share as new M8 model outstrips sales of its predecessor

PUBLISHED : Wednesday, 07 May, 2014, 1:08am
UPDATED : Wednesday, 07 May, 2014, 1:08am

Taiwanese phone maker HTC said its new flagship smartphone, the One M8, was selling quicker than its predecessor, and that the strong showing would help it claw back market share in developed markets such as the United States.

HTC's market share has declined steadily since the company briefly topped the smartphone market in 2011, with sales of its previous flagship, the One M7, failing to match critical acclaim.

HTC was keen to avoid a similar outcome this year and the M8 upgrade was being rolled out with "more effective and efficient marketing", chief financial officer Chang Chia-lin said at a quarterly investor conference yesterday.

"In 2014, we intend to sell more units of the M8 than the M7, which was already the best-selling model in HTC history," Chang said.

Even so, HTC expects second-quarter revenue to land in a range of NT$65 billion (HK$16.7 billion) to NT$70 billion, slightly below the NT$71 billion in the same period last year.

That would nevertheless be about double the NT$33 billion booked in the first quarter, when HTC reported a net loss that was wider than analysts estimated at NT$1.88 billion.

HTC ended 28 months of year-on-year sales declines in March and logged another sales rise last month, indicating strong shipments of the M8, which was released in late March about a year after the M7.

HTC shipped 3.4 million M7 handsets in the second quarter of last year compared with expectations of nearly twice that amount, according to estimates by Yuanta Securities analyst Dennis Chan.

Sales of the M8 had exceeded M7 sales in the same time frame, Chang said, without providing figures.

He said HTC was likely to break even or book a profit for the first half of the year.

Shares of HTC closed up 3.6 per cent before the briefing, reaching a nine-month high on expectations of a strong revenue forecast.

HTC's future is not as dependent on its flagship model in advanced markets as it once was, as sales of lower-priced models in emerging economies are growing at an increasing rate.

"If you want to grow share as a vendor, it is hard to do so if you just rely on one model that costs over US$600," as Apple did until recently with its iPhone, said Gartner principal analyst Annette Zimmermann.

Addressing that sentiment, Chang said HTC would "dominate the mid-tier" and "participate in the affordable segment", which he defined as prices in a range of US$150 to US$200.