* Jan sales down 38 pct y/y, Q1 revenue seen falling y/y
* Mid-tier phone launches to stoke sales later in year
* Remains optimistic on prospects for flagship products
By Paul Carsten and Michael Gold
BEIJING/HONG KONG, Feb 10 Taiwanese smartphone
maker HTC Corp said new lines of mid-tier handsets
will help it return to net profit in 2014, predicting cheaper
products can help it reclaim market share and put an end to over
two years of sliding sales.
HTC's optimism comes despite 27 consecutive months of
falling year-on-year revenue amid stiff competition from
heavyweights like Apple Inc and Samsung Electronics Co
. On Monday HTC said January sales slid 38 percent
from a year earlier to T$9.67 billion ($319.23 million).
Chief Financial Officer Chialin Chang told an analyst and
investor briefing on Monday that 2014 should see a rise in gross
profit margins due to an improved product mix. "What we're
shipping in there, we want to make sure is competitive," Chang
HTC's decline has been swift, squeezed by cheaper rivals in
China as well as Apple and Samsung. Just over two years ago it
supplied one in every 10 smartphones sold around the world: in
2013 its global market share had fallen to just 2 percent,
according to Strategy Analytics analyst Neil Mawston.
That decline has left its mark on investors. HTC's share
price has shown no signs of recovering from a three-year slide
in value to one-tenth of its record high.
HTC has acknowledged the need for action. "The problem with
us last year was we only concentrated on our flagship. We missed
a huge chunk of the mid-tier market," said co-founder and
Chairwoman Cher Wang, speaking to Reuters in an interview in New
York last week alongside Chang.
Amid the decline in its fortunes, HTC's brand image has
suffered, and investors have been desperate for signs of a clear
strategy - though the announced push into mid-tier smartphones
may offer a glimmer of hope for the company.
The CFO said on Monday that new mid-tier and low-end
handsets should provide the majority of revenue, bar sales from
its flagship HTC One phone, after the first quarter. For January
to March, it expects revenue to fall to T$34 billion to T$36
billion from T$42.8 billion a year earlier.
The company in January reported its second consecutive
quarter of operating losses, with a slim net profit of T$300
million ($10 million) for the fourth quarter helped by an asset
Chang was optimistic about prospects for its flagship,
feature-loaded HTC One smartphone, which won rave reviews last
year that have yet to translate into matching sales.
During the investor call, Chang also hinted at a venture
into wearable technology. He declined to give details as to the
type of product, or when it may be announced.