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HTC's sales in February dip to over 13 year low

2018/03/07 11:37:05

Taipei, March 7 (CNA) Taiwan-based smartphone brand HTC Corp. saw its revenue in February fall to its lowest monthly level in more than 13 years, a result analysts attributed to escalating global competition .

In a statement released Tuesday, HTC reported consolidated sales of NT$2.61 billion (US$89.01 million) in February, down 23.24 percent from a month earlier and also down 44.04 percent from a year earlier.

The February figure was the lowest for any month for HTC since August 2004, when it had NT$2.05 billion in consolidated sales, company data showed.

"HTC still cannot overcome stiff competition in the global smartphone market, not only in the high-end segment but also in the mid-to-low range segment," Hua Nan Securities analyst Kevin Su said.

The sales decline in February followed a 15 percent month-on-month drop and 27 percent year-on-year fall in January.

In the first two months of 2018, HTC's consolidated sales were down 35.54 percent from a year earlier to NT$6.02 billion, according to HTC financial statements.

Another factor hurting sales was HTC's deal to sell its smartphone ODM assets to Google for US$1.1 billion, which was finalized in January after being announced in September 2017.

HTC had been producing Google's Pixel smartphone series on a contract basis before the sale, under which about 2,000 HTC engineers went to work for Google.

"HTC sold its smartphone ODM operations to Google, a move that further affected its sales," Su said.

HTC has also been hurt by a maturing smartphone market. Market information advisory firm TrendForce has estimated worldwide production will grow only 5 percent in 2018 from a year earlier.

TrendForce said Chinese brands are emerging and posting a greater threat to international brands, boosting competition in the global market, while smartphone component suppliers are increasing product prices, which are undermining smartphone suppliers' profitability.

HTC is scheduled to unveil its next flagship model -- the U12 -- later this year, likely in April, and some consumers have simply put off their purchases, affecting the company's sales in February, market insiders said.

"More importantly, HTC's efforts in developing virtual reality technology have failed to give a boost to the company's revenue as sales generated from its VR operations accounted for only a small fraction of its total revenue," Su said.

HTC entered the VR business in a bid to diversify its product portfolio and add sales to offset the impact of escalating competition in the global smartphone market.

The Vive, the first VR headset by HTC, was unveiled to the market in 2015 and went on sale globally in April 2016.

HTC unveiled the Vive Pro in Las Vegas a day before the Jan. 9-12 Consumer Electronics Show 2018. The device won the People's Choice award in TechRadar's 2018 CES Awards voted for by the U.K. website's readership.

Amid strong competition in the smartphone market, HCT posted a loss per share of NT$3.8, a net loss for the 10th straight quarter, in the third quarter of last year.

"Unless HTC finds other niche products to develop such as artificial intelligence, I cannot see any immediate turnaround for the company," Su said.

(By Jiang Ming-yan and Frances Huang)