HTC set for mid-range launches, as Q3 forecast bleak

HTC set for mid-range launches, as Q3 forecast bleak

30 JUL 2013

HTC is set to launch a new set of “mid-tier” products in the coming months, as the ailing smartphone maker warned that it is likely to see a loss in the third quarter of 2013.

Speaking in a conference call, Peter Chou, the company’s CEO, said it is set to launch “a series of mid-tier products which will help us regain momentum and market share in this segment in Q4”.

He noted: “We suffered a little bit in market share in this mid-tier from the end of last year to so far, due to intensive competition.”

HTC said that in the third quarter of 2013, it is expecting to see revenue of TWD50 billion ($1.7 billion) to TWD60 billion, marking both a sequential and year-on-year decline.

The company is expecting an operating margin of “0 per cent to minus 8 per cent”, marking the first time it has seen negative results for some time – although Q1 2013 was a close call.

In a conference call, it was noted – several times – that the company is clearing channel inventory of its old products, ahead of the introduction of new devices.

But it was also noted that the costs associated with the flagship HTC One smartphone are not falling at the pace the company was anticipating, which is impacting margins for this particular device.

With the company forecasting a revenue drop for Q3, after only a single quarter’s boost following the launch of HTC One, the company was keen to point out that momentum for this device is “very, very strong”, and “different from last year”, when the flagship One X had only a limited positive impact following its introduction.

The company specifically said that One is performing better than “the hero product we had last year” – in fact, it said that One is doing better than the “combined” flagship devices of 2012, although it is not clear if this was a reference to One X and its One X+ variant, or One X and its smaller One S sibling.

Chou also said that ahead of the launch of its new mid-tier devices, the vendor expects that its recently announced One mini “will do quite well”.

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Steve Costello

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