* Sees Q4 revenue at T$125-135 bln, shipments at 12-13 mln
* analysts expected the firm to sell 14.5-17.2 mln phones in
* Sees Q4 gross margin at around 28 pct, operating margin at
* No plans for below $100 smartphone models
By Clare Jim and Tarmo Virki
TAIPEI/HELSINKI, Oct 31 HTC Corp
warned its sales in the fourth quarter, traditionally a bumper
sales season for smartphones, would drop below the previous
quarter and analysts' forecasts as the Taiwanese firm struggles
to compete against bigger rivals.
HTC, which in a few years has risen from obscure origins as
a manufacturer for other others to become No. 5 smartphone
maker, will lose market share to Apple and Samsung
in the race for holiday season sales, analysts said.
HTC had a fairytale ride in 2010 and early 2011, with its
shares more than tripling in the 14 months to April 2011 and
sales growing four-fold in one and a half years as consumers
snapped up its innovative phones with their distinctive large
But HTC on Monday shocked the market with a forecast for
fourth-quarter revenue to fall to T$125-135 billion from T$135.8
billion in the third quarter, and shipments falling to 12-13
million units from 13.2 million in the third quarter.
On average analysts expected the fourth-quarter smartphone
market to grow 21 percent from the previous quarter, with HTC
selling 14.5 million to 17.2 million phones, according to a
Reuters poll published earlier this month.
Neil Mawston from Strategy Analytics said tougher
competition from the new Apple iPhone 4S and Samsung Galaxy S2
would hurt HTC in the United States and Western Europe.
"The U.S. and Western Europe are HTC's two most important
markets and both Apple and Samsung have been turning up the heat
recently," Mawston said.
Carolina Milanesi from Gartner said HTC's cheaper
smartphones have failed to gain as much traction as the company
might have expected and said at the top end of market it had too
many too similar products.
"They have many products really targeting a similar audience
and this is never a good thing... I think they need to look at
their portfolio very carefully and rationalise it," she said.
HTC also said it expects gross margin and operating margin
at around 28 percent and 14.5 percent, respectively, the same
level as in the third quarter.
HTC said it was more optimistic about LTE 4G phones to be
launched in the first quarter when meaningful shipment would be
seen, and stressed that it had no plans to launch phones
under$100 as the media reported.
"We hope to capture the opportunities from customers
migrating from feature phones to smartphones with our quality;
that's something we won't compromise, we cannot launch low-end
products," HTC CFO Winston Yung told a telephone conference.
Yung said HTC's smartphones for the mass market are
currently priced between $200-$250.
HTC sales and net profit hit new records in the
July-September quarter, with China sales jumping nine-fold from
a year ago thanks to growth in the number of outlets selling HTC
Shares in HTC closed 0.9 percent lower at T$686 before the
statement was issued.