Print 6 comment(s) - last by retrospooty.. on Feb 4 at 9:18 PM

New flagship smartphone "M7" and Chinese growth raise hopes for a turnaround

For embattled Taiwanese smartphone maker HTC Corp. (TPE:2498) the audited version of fiscal Q4 2012 financials brought a bit of good news and a bit of bad news.

On the one hand HTC's profitability slide continued, with net profit dropping to NT$1B ($33.82B USD) -- or an earnings per share of NT$1.21 ($0.04 USD/share).  On the other hand, that beat analyst predictions by over 20 percent.  A survey of 17 analysts by Financial Times predicted earnings of NT$0.97 per share.

Quarterly revenue fell at NT$60B ($2.03B USD), slightly less than the analyst consensus of NT$61.7B.  However, the a better-than-expected 23 percent gross margin and reduced operating margin of 1 percent drove up the profit slightly, despite the revenue miss.

HTC posted a troubling outlook for Q1 2013, though, suggesting revenue could dip as low as NT$50B.  In Q1 2012, HTC pulled in NT$67.8B in revenue.

HTC Chief Financial Officer Chang Chia-Lin looked to cheer up analysts in the conference call, announcing plans to aggressively target the Chinese market with more affordable smartphones.  HTC is one of the fastest growing players in the Chinese market, the world's largest smartphone market.  However, price is an obstacle to its growth -- its cheapest model is 1,999 yuan ($320).

HTC Sign
HTC wiill sell cheaper smartphones in China this year. [Image Source: Cult of Mac]

CFO Chia-Lin remarks, "We're going to go down, but not below 1,000.  We see there's still room to play [in 1,000 to 2,000 yuan phones]."

A new flagship smartphone, code-named "M7" is also in the works.  Expected to launch mid-month at events in New York City and London, the phone is rumored to feature a super-high resolution camera.

Overall Taiwan's stock market rose 12 percent in 2012.  However, HTC's stock was pounded down 40 percent as revenue and profits slid downward.  A major culprit is a weakening brand.  While HTC is still a top tier Android phonemaker, it has fallen far behind Apple Inc. (AAPL) and Samsung Electronics Comp., Ltd. (KSC:005930) in brand image.

Both Samsung and Apple predicted similar Q1 slumps on weakening demand.

Sources: HTC, FT [analyst estimates], Reuters

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RE: Not surprising...
By retrospooty on 2/4/2013 4:43:22 PM , Rating: 1
I really dont see it that way. There is HTC, Motorola, Sony, Huawei, ZTE, Asus, and many others, as well as Google's Nexus line. There are a TON of 5 inch 1080p phones announced, but this one in particular has me excited these days...

RE: Not surprising...
By retrospooty on 2/4/2013 5:38:58 PM , Rating: 2
RE: Not surprising...
By Tony Swash on 2/4/2013 6:55:55 PM , Rating: 2
I hear what you are saying but I do think though that the relationship between Google and Samsung is going to get tricky (and hence very interesting).

There is an interesting article at OS News, entitled 'Battle of the Androids: Google Android vs. Samsung Android', have a look because I think you will find it interesting.

Unfortunately I cannot post a direct link because DT's halfwitted spam filter keeps blocking it.

Plus Tomi Ahonen has one of his trademark ultra long but well informed pieces about how he rates Tizen as an OS that Samsung might seriously begin to punt in the coming year.

(I didn't post a direct link to the story because DTs halfwitted spam filter blocked it)

For the time being Samsung still uses Google services but for how long, especially if Google sets out to deliberately undercut Samsung by selling handsets at cost?

RE: Not surprising...
By retrospooty on 2/4/2013 9:18:32 PM , Rating: 2
I think you over analyze it. Google makes money on samsung to, it's really not a big deal. In today's business world sometimes your competition is your partner and sometimes your partner is your competition. One of the few companies I have ever heard of throwing a wrench in that is Apple. Oh you are our biggest competition so we don't want you to make our LCDs anymore. Childish really... Whatever, I see Samsung branching out into Windows Mobile, Tizen, maybe others but Android will still be its biggest seller. And this is all a good thing. More competition means more options means better phones and better prices for us all. It even works for you too. the better Samsung and Android do makes Apple push the envelope all that much harder. So in the end they are pushing things out faster then they would have without the competition.

"We shipped it on Saturday. Then on Sunday, we rested." -- Steve Jobs on the iPad launch

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