Smartphone vendor HTC Corp (宏達電) yesterday posted its first quarterly loss since the fourth quarter of 1999 of NT$2.97 billion (US$101.13 million), a much greater loss than the NT$677 million estimated by analysts.
The figure reflected a reversion from net profits of NT$1.25 billion in the previous quarter, and net profits of NT$3.9 billion during the same period last year, according to data collected by the Taiwan Stock Exchange.
“HTC is ramping up production of its mid-end and entry-level smartphone products, but the pace remains too slow for the company to expand its market share in emerging markets in the near term,” Horizon Securities Co (宏遠證券) analyst Cheng Kai-ming (鄭開明) said by telephone yesterday.
“HTC either needs to develop more innovative high-end smartphone products in the Western markets, or adopt pricing strategies and sacrifice its gross margin in order to compete against Chinese rivals including Xiaomi Corp (小米), Huawei Technologies Co Ltd (華為) and ZTE Corp (中興),” Cheng said.
Last quarter, revenues contracted 32.78 percent quarter-on-quarter, or 32.97 percent year-on-year, to NT$47.05 billion last quarter, falling short of its forecast range from NT$50 billion to NT$60 billion.
During the July to September period, HTC suffered an operating loss of NT$3.5 billion, with a negative operating margin of 7.43 percent, HTC said in the statement. HTC has expected operating margin to fall between 0 and minus-8 percent.
As the smartphone market is reaching saturation point, lukewarm demand for high-end smartphone models dragged down HTC’s profitability last quarter to a net loss of NT$2.97 billion, or loss per share of NT$3.58, according to the statement.
Cheng was skeptical about HTC chief executive officer Peter Chou’s (周永明) remark at a teleconference held in July, in which Chou said HTC’s profitability might bottom out last quarter
before recovering this quarter.
Cheng said HTC needs to adopt effective product strategies in response to saturating smartphone markets in the US and Europe, as well as intense competition in China’s smartphone market.
This quarter, despite HTC’s plan to roll out a larger-sized smartphone, dubbed HTC One Max, later this month to boost year-end sales, the launch of new smartphone and tablet products by Samsung Electronics Co, Sony Corp and Apple Inc may dilute market demand and weaken HTC’s sales, Taishin Securities Investment Advisory Co (台新投信) chairman Andy Wu (吳火生) said by telephone yesterday.
“Based on the company’s sales performance during the first nine months of the year, it is going to be very likely to see HTC post a net loss for this year,” Wu said.
Asked if HTC is better following Nokia Ojy’s and BlackBerry Ltd’s lead and considering mergers with or acquisitions by other firms, Wu said “that will be a great pity and the worst scenario for HTC to end up at,” suggesting that HTC must soon act before its value shrinks or make efforts to secure its brand image.
HTC yesterday said it has spent NT$1.03 billion buying back 7.79 million HTC shares on the local stock market, according to a company filing to the Taiwan Stock Exchange. The company plans to cancel those shares, it said.
Semiconductor business between Taiwan and the US is a “win-win” model for both sides given the high level of complementarity, the government said yesterday responding to tariff threats from US President Donald Trump. Home to the world’s largest contract chipmaker, Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), Taiwan is a key link in the global technology supply chain for companies such as Apple Inc and Nvidia Corp. Trump said on Monday he plans to impose tariffs on imported chips, pharmaceuticals and steel in an effort to get the producers to make them in the US. “Taiwan and the US semiconductor and other technology industries
The US Federal Reserve is expected to announce a pause in rate cuts on Wednesday, as policymakers look to continue tackling inflation under close and vocal scrutiny from US President Donald Trump. The Fed cut its key lending rate by a full percentage point in the final four months of last year and indicated it would move more cautiously going forward amid an uptick in inflation away from its long-term target of 2 percent. “I think they will do nothing, and I think they should do nothing,” Federal Reserve Bank of St Louis former president Jim Bullard said. “I think the
SMALL AND EFFICIENT: The Chinese AI app’s initial success has spurred worries in the US that its tech giants’ massive AI spending needs re-evaluation, a market strategist said Chinese artificial intelligence (AI) start-up DeepSeek’s (深度求索) eponymous AI assistant rocketed to the top of Apple Inc’s iPhone download charts, stirring doubts in Silicon Valley about the strength of the US’ technological dominance. The app’s underlying AI model is widely seen as competitive with OpenAI and Meta Platforms Inc’s latest. Its claim that it cost much less to train and develop triggered share moves across Asia’s supply chain. Chinese tech firms linked to DeepSeek, such as Iflytek Co (科大訊飛), surged yesterday, while chipmaking tool makers like Advantest Corp slumped on the potential threat to demand for Nvidia Corp’s AI accelerators. US stock
Cryptocurrencies gave a lukewarm reception to US President Donald Trump’s first policy moves on digital assets, notching small gains after he commissioned a report on regulation and a crypto reserve. Bitcoin has been broadly steady since Trump took office on Monday and was trading at about US$105,000 yesterday as some of the euphoria around a hoped-for revolution in cryptocurrency regulation ebbed. Smaller cryptocurrency ether has likewise had a fairly steady week, although was up 5 percent in the Asia day to US$3,420. Bitcoin had been one of the most spectacular “Trump trades” in financial markets, gaining 50 percent to break above US$100,000 and
RSS