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HTC says prepare for disappointment

  • 31 July 2013
  • Written by 
  • Published in Market

HTC has joined a growing list of smartphone strugglers, warning its revenue will be down by as much as 30% this quarter.

The Taiwanese-based tech company said its third-quarter revenue could fall as much as 30% from the previous three months, according to Reuters, disappointing analysts and shareholders alike.

HTC said it expects revenue this quarter of NT$50-60 billion (US$1.7-2 billion), far below a market consensus of NT$75.65 billion and its previous quarterly revenue of NT$70.7 billion.

HTC is in a more vulnerable position than most, relying solely on smartphone sales, where competitors like Samsung can count on revenue from other sources like televisions.

Analysts were also skeptical about the short-term prospects of the company.

“Negative across the board,” Daniel Chang, an analyst at Macquarie Securities, told Reuters.

“It doesn’t seem like the company has any strategy that can turn this around.”

HTC shares have now fallen 44% for the year to date, their lowest since 2005.

The revenue situation comes at an inopportune time for HTC, as its Finnish rival Nokia is suing the company for alleged patent infringement.

Nokia filed a suit against HTC in the US last Thursday, the latest move in a patent war that seems to be mirroring the ongoing battle between Apple and Samsung.

To date Nokia has had a win in Amsterdam, while HTC a victory in Germany.

“Despite the German courts confirming infringements of Nokia patents in HTC products, HTC has shown no intention to end its practices, instead it has tried to shift responsibility to its suppliers. We have therefore taken these further steps to hold HTC accountable for its actions,” Nokia said in a statement.

“Upon receiving the official document, HTC is to consider all legal options to protect our rights,” HTC said in reply.

The news comes at a tumultuous time generally for smartphone makers, with Samsung, Microsoft and Apple all facing uncertain growth and a fatigued market.

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