HTC Corp (宏達電), the leading maker of smartphones running on Windows Mobile and Android platforms, yesterday reported that net income in the first quarter edged up 3.1 percent year-on-year to NT$5 billion (US$158 million), or NT$6.42 per share.
First-quarter revenue expanded 19.3 percent year-on-year to NT$37.7 billion, beating the company’s sales forecast of between NT$32 billion and NT$34 billion made in January.
“The strong business growth momentum was a result of effective brand execution,” HTC said in a statement.
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Last month alone, revenue was up 32.4 percent to NT$16.4 billion from a year earlier, it said.
HTC shares rose 1.6 percent to close at NT$381 on the Taiwan Stock Exchange yesterday, outpacing the TAIEX’s 0.79 percent rise.
The Taoyuan-based company has embarked on an aggressive campaign to increase brand awareness this year in line with its strategy to position itself as a global consumer smartphone brand.
The company launched the HTC Smart handset in India and Taiwan last week, redrawing competition in the smartphone market with the introduction of a model priced below NT$10,000.
HTC Smart, which is also the the maker’s first model running on Qualcomm Inc’s Brew mobile application development platform, is expected to help it reach a wider market with its attractive price of NT$7,900.
HTC has also garnered support in the US, collaborating with T-Mobile USA in launching the HTC HD2 and Sprint in marketing the HTC EVO, its first 4G handset using WiMAX technology.
“We are encouraged by the visible [HTC] product promotions by major US operators and believe their increasing support and HTC’s own marketing campaigns would boost shipments in the coming quarters,” BNP Paribas said in a report on Wednesday last week.
“In our view, such endorsements by major operators increase the legitimacy of the HTC brand. We believe product promotions by these operators will complement HTC’s own marketing campaign to improve its brand awareness,” the report said.
BNP raised its estimate of HTC shipments this year to 15.8 million units, from its earlier projection of 14.5 million. The revised forecast represents an increase of 35 percent from last year’s shipments of 11.7 million units.
“This is achievable as HTC has indicated it intends to push volume growth to improve economies of scale,” the report said.
Despite the firm’s stronger-than-expected first-quarter results, Citigroup analyst Kevin Chang (張凱偉) yesterday retained his bearish view on HTC’s margin prospects following the company’s recent aggressive price cuts on new products.
“While HTC’s first-quarter earnings are 20 percent above our estimate, we see little upside risk to our full-year earnings forecast. Our 2010 earnings are at least 20 percent below market consensus,” Chang wrote in a client note yesterday.
Citigroup predicted HTC would post a first-quarter profit of NT$4.23 billion on sales of NT$34.86 billion.
In related news, HTC is seeking a US patent on a technology to keep images on mobile devices from shaking when the device is moved violently, Bloomberg reported yesterday.
The patent application covers a method of adjusting the display in the video according to acceleration variance.
A device equipped with this invention will permit the user to watch the video comfortably, without nausea, even if the device itself is in “an unstable state,” the report said.
The technology covered by the patent can be used in any mobile electronic device and implemented through computer program codes, HTC said in its application.
ADDITIONAL REPORTING BY BLOOMBERG
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