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HTC to remain competitive: Deutsche Bank

2012/07/24 12:07:34

Taipei, July 24 (CNA) Taiwanese smartphone maker HTC Corp. will maintain its competitiveness with product innovations despite intensified competition in the global mobile market, Deutsche Bank AG said Monday in a research note.

The German bank estimated that HTC shipped 9 million units in the second quarter, a decrease of 24 percent from the same period a year ago.

The decline in shipments would be less steep, however, than the 39 percent fall expected for Finnish phone maker Nokia Oyj and the 26 percent drop forecast for BlackBerry maker Research In Motion, the bank said.

Nokia shipped an estimated 10.2 million smartphones in the second quarter while Research In Motion shipped 7.8 million units, according to the bank.

"We think these developments indicate the intensified competition among the No. 3-5 vendors in the smartphone space," Deutsche Bank analyst William Yang wrote in the note.

"On the other hand, we see HTC's leading competitiveness in the No. 3-5 group," he said.

Yang mentioned that Microsoft Corp. has announced that HTC will be one of its key partners in launching Windows 8 smartphones in the second half of 2012, a move in contrast to the company's strategy for the Windows 7 version, which primarily supported Nokia.

"We think it indicates that HTC's competitiveness and relationship with OS (operating system) providers remain solid," he added.

Other upside factors for HTC, Yang said, include better-than-expected market share expansion in Europe and Asia driven by HTC's continued product innovations and a faster-than-expected 4G (fourth-generation) smartphone adoption rate in the U.S.

Despite these potentially positive factors, however, Deutsche Bank trimmed its target price for HTC to NT$365 (US$12) from NT$400 and kept a stock rating of "hold" because of intensified competition from arch rivals Samsung Electronics Co. and Apple Inc.

As of 10:11 a.m. Tuesday, HTC shares had fallen 2.26 percent to NT$280.50 in Taipei trading.

Deutsche Bank forecast that HTC's revenue will reach NT$98.7 billion in the third quarter of this year, up 8 percent from the second quarter, and that the company's operating margin will improve to 10.6 percent in the third quarter from 9 percent.

The bank also expected HTC's shipments to decline from 45 million units in 2011 to 39 million units in 2012, with its average selling price forecast to shrink from NT$355 to NT$325 during the year.

(By Jeffrey Wu)