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HTC shares dive on Windows operating system glitch concerns

2010/10/18 20:32:44

Taipei, Oct. 17 (CNA) Shares of smartphone maker HTC Corp. took ahit Monday amid concerns over glitches in the Windows Phone 7 (WP7)operating system on which five of the company's new models will run,dealers said.

HTC closed down 6.87 percent at NT$624.00, the lowest level sinceSept. 3, with 12.94 million shares changing hands, while thebenchmark weighted index fell 1.76 percent to 8,060.54.

"The glitches made investors here very cautious, as they areafraid that the technical problem will affect HTC's shipments in thefourth quarter," TLG Asset Management analyst Arch Shih said.

Last week, HTC unveiled the five new models based on the WP7operating system -- the HTC 7 Surround, the HTC 7 Mozart, the HTC 7Trophy, the HTC 7 Pro and the HTC HD7 -- which will hit markets inNorth America, Europe and the Asia-Pacific region from later in themonth.

While HTC clarified during the trading session that it had notedthe problem and was taking action to resolve it, selling extendeduntil the end of the session.

"The market had expected that the company would post significantsales for the fourth quarter. But the technical problem dampenedinvestor sentiment," Shih said.

Taiwan International Securities analyst Benson Huang agreed,saying that investors fear HTC will not meet a market expectation of8.8 million units shipped for the fourth quarter.

Huang said the market is also worried about HTC's falling grossmargin amid fierce price competition.

"The market anticipates that the new models will lend somesupport to its gross margin, " Huang said. "The possible impact onshipments from the technical problem has unnerved investors."

(By Tien Yu-pin and Frances Huang)