‘Superphone’ not the One to lift earnings hope for HTC
Taiwan smartphone maker is likely to slip into red as the return on its well-received handset falls short of target amid tough competition
Taiwan's once-fast-growing flagship smartphone maker HTC is forecasting a possible loss this quarter despite interest in its latest "superphone" models, because of what analysts describe as tougher competition at the high and low ends of the world market.
The firm, which reported a 93 per cent surge in revenue in 2010, said last month that it expected zero profit or a loss of up to 8 per cent by the end of next month.
Sales didn't meet their expectations. They spent a lot of money on marketing and [research and development], but the return didn't meet their target
Profit has been stuck at about 1 per cent of revenue since the final three months of last year.
HTC reported income of NT$70.7 billion (HK$18.3 billion) for the second quarter, a year-on-year decline of 83 per cent.
The developer says its One handsets have been well received as they slowly reach markets this year and expects additional products in the pipeline to shore up business.
But the handsets, though technically solid, have failed to recoup research and development and marketing costs because of increased competition and the shorter lifespan of new devices, industry experts say.