HTC sagging revenue meter with cheaper phones in China

Taiwanese firm HTC said Monday that it expects margins to continue sliding in the wake of increased competition from rival companies, including Apple and Samsung.

HTC said it expects revenue to fall by 17 percent in the three months prior to March 31, based on the results of the fourth quarter of 2012, which is worse than analysts' forecasts.

The manufacturer of smartphones expects first-quarter revenue of between NT $ 50 billion NT $ 60 billion (U.S. $ 1.69 billion to U.S. $ 2.03 billion). According to Reuters, this figure is lower than analysts' forecasts of NT $ 62.77 for the first quarter of 2013. HTC also provides a profit margin in the first quarter gross between 21 percent and 23 percent, which is at best equal to 23 per cent in the fourth quarter of 2012. The margins Operating profit is expected to be between 0.5 and 1 percent, compared with 1 percent in the fourth quarter and 7.5 percent per year ago.The Taoyuan-based company faced competition increased its rivals, including Apple and Samsung, as well as the emergence of companies that are targeting smartphone market entry level. In an interview with the Wall Street Journal, the CEO of HTC Peter Chou has acknowledged that the company performed poorly in 2012, but remains optimistic that this year will be better.

Chou said the competition was "too strong" for the Taiwanese firm - down HTC obvious benefits of 79 percent a year - ". Would not be too bad," but that 2013

"Our competitors are too strong and very resourceful, pouring a lot of money in marketing. We have not done enough in terms of marketing. "Chou told the Journal.

According to research firm IDC, HTC has lost its place among the top five manufacturers of smartphones as shipments fell 25 percent last year. In the fourth quarter, HTC is estimated at only 4.3 per cent of total market share claimed smartphone.

In a conference call this morning, HTC CFO Chang Chia-Lin told investors that the company will now begin offering low-end models cheap smartphones in order to consolidate the books balance. At present, the cheapest available on the phone in China is priced at 1,999 yuan ($ 320), but HTC is ready to go lower in its attempt to target emerging markets over the next year.

"We're down, but not below 1000," said Chia-Lin. "We see that there is still room to play."
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