HTC hopeful of turnaround despite expected fall in revenue

Taipei: Taiwan smartphone maker HTC Corp expects to post much lower-than-expected revenue in the first quarter, underscoring analyst views that it will face another weak quarter and an uphill struggle to prove to investors it still retains its innovative touch.

HTC said yesterday it sees a drop in revenue of as much as 36 per cent in the first quarter to between Taiwan new $65 billion (Dh8.04 billion) and T$70 billion, from T$101.42 billion in the previous three months, as it prepares to launch new models, but said its difficulties were "short term".

The world's No 5 smartphone maker by shipments is widely expected to roll out four models later this month at the Barcelona Mobile World Congress, including an ultra-slim type, currently codenamed the HTC Ville, and one that uses advanced quad-core chips.

Challenge

The challenge for HTC, which was once the standard bearer of the Android operating system but dropped one place in world rankings last quarter, is to make such devices stand out in an increasingly competitive marketplace, analysts say.

"It can be turned around," says Melissa Chau, Singapore-based research manager for IDC, speaking before the company gave its first quarter revenue guidance. "But the problem remains the same: How are they going to differentiate?"

The software, and increasingly the hardware, have become commoditised, forcing HTC to hunt for new ways to stand out as it scrambles to compete with Apple's iconic iPhone and Samsung Electronics' Galaxy range.

The first quarter revenue forecast was well below guidance in a poll of 19 analysts by Thomson Reuters, which had forecast HTC would see T$89.64 billion in revenue this quarter. Adding to the disappointing guidance, HTC reported yesterday a 52.6 per cent drop in sales in January from a year earlier.