HTC Feel Pain, Predict Q2 Gains

Written by Oonagh Reidy & Computer Daily News     07/05/2014 | 11:01 | Category: HOME OFFICE

Phone maker posts net loss Q1

HTC Feel Pain, Predict Q2 GainsHTC post a net loss of NT$1.88 billion for first quarter of 2014, but is predicting better times ahead, with sales to double on popularity of the new One M8 and cheaper Desire's. 

However, the phone maker felt pain in Q1 with sales of NT$33.1 billion, and operating margin fell 6.2% and earnings share also down to -NT$2.28. 

Despite the crippling loss, HTC said there's a buzz around the newly launched One (M8) and  Desire 816, which have demonstrated strong momentum in two of the worlds biggest phone markets - China and India, and other markets. 

The Taiwanese phone maker provided a better outlook for 2Q, predicting revenues to double to NT$65 billion - NT$70 bn, higher gross margin and EPS is expected to resurge to NT$2.21 - NT$3.00.   

HTC's April sales rose 36% compared to the previous month, and rose 12% year-on-year. 

Management also insists phones like Desire 816 are raising the bar for the mid-tier segment, a tier it intends to dominate, CFO Chang Chialin said at an earnings call today. 

"We believe we have the capability, the combination of factors in terms of what consumers need. 

"We also will, as you have seen in the market, participate in the affordable segment."

However, HTC no longer appear in the top 5 phone makers, globally, pipped by Samsung, Apple and LG. 

But the Taiwanese phone company are said to have made several management changes, which includes hiring former Samsung US Marketing boss Paul Golden as a consultant, reports Bloomberg

Peter Chou, HTC CEO said, "we are thrilled to see such positive customer response from around the world towards HTC One, which inspired us to make the best even better.

"Now, we not only have an incredible flagship product HTC One (M8), but also a much more optimized product portfolio including powerful mid-tier phones, innovative accessory offerings like the HTC Dot".

The company, who made its name on the Android platform, has started outsourcing production of some of its handsets in a bid to cut costs on cheaper models for developing markets. 

It has selected Taiwan-based contract manufacturer Compal Electronics and China's Wingtech Group for at least three of the new models in its midprice Desire series.

Traditionally, HTC concentrated on high-end models, and produced all at its own factories.