Asus cuts Q2 revenue target by 5% - Mobile World Live

Asus cuts Q2 revenue target by 5%

15 JUN 2016

Taiwan’s Asus cut its Q2 revenue target 5 per cent to TWD90 billion to TWD95 billion ($2.9-3.1 billion) due to sluggish demand for smartphones in Asia and falling prices in the face of rising competition.

The announcement comes after it reduced its smartphone shipment goal for the year by five million units to 25 million. At the beginning of the year it said it aimed to boost smartphone shipments this year 46 per cent to 30 million units. Its smartphone shipments last year jumped 140 per cent to 20.5 million units.

IDC recently reduced its 2016 outlook for smartphone growth, forecasting the market to grow by 3.1 per cent to 1.48 billion shipments, a reduction of 2.6 points on its last forecast. That marks a significant slowdown from 10.5 per cent growth in 2015 and from 27.8 per cent in 2014.

Asus recently upgraded its ZenFone line, unveiling three devices including premium and phablet smartphones. The vendor is scheduled to launch new high-end smartphones and notebooks in Q3 in an attempt to boost the average selling prices of its devices, DigiTimes reported.

Despite the lower revenue target, Asus still expects its operating profit margin to remain at 4-4.5 per cent, DigiTimes said.

Its local rival HTC also continues to struggle as smartphone demand weakened in China and developed markets, reporting revenue for May declined 37.4 per cent year-on-year to TWD6.75 billion ($207 million). Its Q1 revenue dropped 64 per cent to TWD14.82 billion from a year ago. It posted a net loss of TWD15.5 billion last year.

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Joseph Waring

Joseph Waring joins Mobile World Live as the Asia editor for its new Asia channel. Before joining the GSMA, Joseph was group editor for Telecom Asia for more than ten years. In addition to writing features, news and blogs, he...

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