HTC expects quiet Q4 as competition intensifies

HTC expects quiet Q4 as competition intensifies

Taipei: HTC, the world’s No. 4 smartphone brand, expects fourth-quarter revenue to be almost 15% lower than the same period a year earlier, as competition intensifies and prices decline in the fast-growing sector.

Revenue in the October-December quarter could clock in at between T$40-42 million ($1.3 million), the company said in a statement on Monday, lower than the T$47 million recorded a year ago.

Average selling prices are also expected to fall about 10% from a year ago, as bigger rivals such as Nokia and Apple look to muscle out smaller players, while upstarts such as Acer depress prices.

“Things are sounding a little subdued for them," said Vincent Chen, an analyst at Yuanta Securities. “I’m hearing that HTC doesn’t have visibility beyond the next couple of months, and the first quarter could be very weak."

HTC announced worse-than-reported third-quarter results in October, hit by rapidly intensifying competition in the smartphone sector from rivals such as Blackberry maker Research in Motion.

Gross profit margins in the fourth quarter will likely come in at about 32.5%, the company said in a statement, while operating expenses are likely to take up 17% of its total revenue.

HTC shipped some 2.4 million smartphones in the third quarter, research firm IDC said on 5 November, keeping its fourth place on the charts behind Nokia, RIM and Apple.

Its shares have remained largely flat this year, lagging a roughly two-thirds advance on the benchmark TAIEX share index.