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HTC profit growth slows; has chance to narrow Apple gap

HTC profit growth slows; has chance to narrow Apple gap
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First Published: Thu, Oct 06 2011. 02 55 PM IST

An HTC Status mobile device . Bloomberg.
An HTC Status mobile device . Bloomberg.
Updated: Thu, Oct 06 2011. 02 55 PM IST
Taipei: Taiwan smartphone maker HTC Corp’s net profit rose 68% in the third quarter, much slower than in previous quarters but within expectations as customer demand for the hi-tech gadgets stayed strong even in the face of a global economic slowdown.
The world’s No.5 smartphone maker could keep growth momentum and even increase market share, analysts say, after archrival Apple Inc’s new iPhone model failed to wow fans and the US maker lost its inspirational leader Steve Jobs, who died on Wednesday.
An HTC Status mobile device . Bloomberg.
“Rivals such as HTC may gain after Apple failed market expectations,” said Aaron Jeng, analyst of Nomura Securities.
“Apple will not have an LTE phone and larger panel phone in the coming year, which may prompt consumers to choose to use other brands.”
HTC, the world’s No.5 handset maker, reported on Thursday third-quarter profit of T$ 18.64 billion ($608.55 million), compared to T$11.1 billion a year earlier and T$17.52 billion in the previous quarter.
The results are unaudited and the company did not give any details in a brief statement.
The growth rate was much smaller than the previous quarters, slowing from double in the second quarter and triple in the first.
A poll by Thomson Reuters I/B/E/S of 18 analysts had forecast a median profit of T$18.39 billion.
“I’m more worried about its fourth-quarter results because of the macro concern; it will not be a traditional hot season,” said Bonnie Chang, analyst of Yuanta Securities.
The company said in a separate statement its consolidated sales for September reached T$45.4 billion, up 68% from the T$27.06 billion in the same month a year earlier but flat from the T$45.3 billion in August.
Florian Seiche, head of HTC’s business in Europe, Middle East and Africa, said last month that he sees a strong end to the year as consumer demand for its latest gadgets is expected to defy wider macro-economic worries.
HTC has been aggressively launching new smartphones and is unveiling a new model on Thursday following the launch last month of two new smartphones using Microsoft’s Windows operating platform.
It has a reputation for fast innovation and has risen to become a top global brand in five years from obscure origins making phones for others.
However, market observers also cautioned that HTC might also suffer from a price competition ignited by Apple’s ambition to tap deeper into new markets.
“We see the price range of iPhone widening from Apple’s launch of iPhone 4S, it shows Apple’s strategy to expand into the mid-market and this would be a threat to HTC because it’ll bring in more price competition,” said Andy Wei, a fund manager of PCA Prudential in Taipei.
“HTC’s good at high-end models, but the penetration rate is already very high in this segment.”
HTC, one of the largest manufacturers of devices that use Google’s Android operating system, is embroiled in an acrimonious patent war with Apple, which has filed several patent lawsuits against the Taiwan-based company in Delaware in the last two years.
In tribute to Jobs’ death, HTC’s CEO Peter Chou said on Thursday he was “saddened by the loss of a great man. My heartfelt condolences go out to his family. I respect and admire Steve Jobs for the incredible impact he has had on the technology industry.”
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First Published: Thu, Oct 06 2011. 02 55 PM IST
More Topics: HTC | Market Results | Steve Jobs | Apple | iPhone |