HTC misses targets despite release of new One Max phone
Taiwan’s largest smartphone maker struggles as rising competition from Chinese brands sees sales fall
Taiwanese smartphone maker HTC reported a worse than expected net fourth-quarter profit, despite aggressive cost cutting and a one-time gain. Photograph: Pichi Chuang/Reuters
HTC, Taiwan’s largest smartphone maker, posted net income that missed analyst estimates for a fourth consecutive quarter as rising competition from Chinese brands led to a decline in sales.
Fourth-quarter net income was NT$310 million (€7.4 million), the Taoyuan, Taiwan-based company said, missing the NT$694 million average of 20 analysts’ estimates compiled by Bloomberg. Operating loss of NT$1.56 billion was narrower than the NT$1.72 billion loss average of estimates. Shares fell the lowest since October.
HTC’s release of its One Max phone failed to halt a nine- quarter slide in sales as China’s Lenovo Group and Huawei Technologies gained market share even as the Taiwanese company signed Hollywood star Robert Downey Jr. to promote its brand.
HTC’s ability to turnaround three years of share declines may hinge on the sale of 4G handsets through China Mobile and the success of its next major handset to be announced this quarter. “They need to get a good review for their flagship model and they can’t afford to have any supply chain problems like last year,” said Dennis Chan, an analyst at Yuanta Financial Holding in Taipei who recommends investors sell the stock.
HTC One, a thin, metal-encased handset released in the US in April, received positive reviews while sales were crimped by production delays including a shortage of parts. One Max, modeled on HTC One and released in October, became HTC’s largest handset, with a 5.9-inch (15-centimeter) screen, fingerprint sensor and HTC Zoe video highlights function. The device was the company’s only major release for the quarter, with updated versions of its Desire series also going on sale.