Asian firms challenge Apple with snazzy new smartphones

BARCELONA, Spain — Several big Asian phone companies launched new high-end smartphones and other wireless gizmos on Sunday, hoping to challenge US giant Apple in a big year for wireless gadgets.

Samsung, fellow South Korean firm LG and hip Chinese maker HTC timed their smartphone launches to grab the attention on the eve of the Mobile World Congress, the world’s biggest telecoms trade fair, in Barcelona, Spain.

In a head-on challenge to Apple’s popular iPhone 6 which was released last year, Samsung came out fighting on Sunday with the Galaxy S6, a smartphone with a touchscreen that curves around the edges and has a wireless charger.

It also presented the larger S6 Edge, a “phablet” somewhere between a tablet and a phone in size.

LG unveiled a new top-line phone with a curved back to sit snugly in the palm, the LG Flex 2, as well as a range of four new mid-range smartphones and two new luxury internet-connected watches.

At a noisy stage presentation before a crowd of hundreds, HTC chief executive Peter Chou meanwhile presented the HTC One M9, with a grey metallic handset moulded from a single piece of aluminium.

HTC also revealed a new connected “fitness band” body-monitoring bracelet and a virtual reality headset that it said it hoped to sell commercially by the end of the year.

Apple as usual was staying away from the Barcelona show but was reported to be preparing a coup with the launch next month of its new Apple Watch, reflecting a major trend in wearable gadgets this year.

The chief executive of Samsung’s mobile division, J.K. Shin, said the company aimed to set “a new standard to drive the global mobile agenda”, claiming his phones had the fastest processers and most high-performance cameras on the market.

Samsung is the world’s biggest seller of smartphones but saw its world market share fall last year from 34 percent to 20 percent, according to a report by tech consultancy IDC.

“There’s a risk Samsung’s 2015 flagship devices are insufficient for the company to regain brand leadership among consumers and businesses looking for high-end smartphone experiences,” said Thomas Husson, an analyst at another consultancy, Forrester, in a note after Sunday’s launch.

“Samsung’s lack of software DNA will still prevent it from delivering truly differentiated service experiences like Apple does.”

Also present at the congress were two of the world’s other biggest-selling smartphone makers, Chinese companies Huawei and Xiaomi.

Joining in the rush for big launches on the eve of the trade fair, Huawei unveiled its first “smartwatch”, a round luxury design that, like LG’s, can display incoming call and message alerts.

The companies refused to cite consumer prices for the new products. Top-end smartphones typically cost several hundred dollars.

source: interaksyon.com

HTC fourth-quarter profit below expectations

TAIPEI — Taiwanese smartphone maker HTC reported a worse than expected net fourth-quarter profit on Sunday, despite aggressive cost cutting and a one-time gain.

The company reported net profit of T$0.3 billion ($10 million), compared to a net loss of T$2.97 billion ($99.9 million) in the previous quarter and profit of T$1.01 billion ($34 million) in the same quarter of 2012.

The number highlights how quickly problems have piled up at a company that just over two years ago supplied one in every 10 smartphones sold around the world.

The company, which has lost nearly three-quarter of its market value in the last two years, is now worth about $4 billion, dwarfed by rivals like Apple and Samsung Electronics Co Ltd.

New management installed in the last quarter to tackle that slide must persuade customers the brand can still stand for stylish, feature-loaded phones, while keeping a lid on development costs.

Despite its latest flagship product, the HTC One, garnering rave reviews, the company’s global share of the smartphone market has declined to a mere 2.2 percent in the third quarter of 2013 from a peak of 10.3 percent in the third quarter of 2011, data from research firm Gartner show.

While the company’s recent “Here’s To Change” campaign has seen an advertising revamp featuring “Iron Man” star Robert Downey Jr., analysts remain skeptical about the firm’s ability to differentiate its brand image in a highly-saturated playing field.

The company has embarked on a cost-cutting campaign that includes buying its chips from cheaper vendors and outsourcing production. It also sold its stake in headphone brand Beats Electronics LLC, booking a one-time pre-tax profit of T$2.5 billion ($85 million), which would be recorded in the fourth quarter.

Shuttered factories, a wave of executive departures and top-level reshuffling are symptoms of what industry insiders see as the company’s biggest problem: connecting with consumers.

source: interaksyon.com

HTC turnaround prospects bleak as profit slides

TAIPEI — Taiwan’s HTC Corp said third-quarter revenue could fall as much as 30 percent from the previous three months, far worse than expected and underscoring deepening troubles for a smartphone maker with little prospect of an immediate turnaround.

A delayed launch for its much-hyped flagship phone, the HTC One, has only exacerbated inventory troubles and highlighted its lack of scale when compared to Samsung Electronics Co Ltd and Apple Inc at a time when the market for high-end phones is said to be approaching saturation.

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

While the company said it expected an improvement in the fourth quarter, analysts were skeptical about a significant near-term reversal of fortunes.

“Negative across the board,” said Daniel Chang, an analyst at Macquarie Securities. “It doesn’t seem like the company has any strategy that can turn this around.”

HTC shares have fallen 44 percent for the year to date and are now trading at lows not seen since 2005.

It is not the only smartphone maker facing an uphill battle as growth for higher-end phones slows, with Nokia Oyj and BlackBerry Ltd also recently reporting weak results.

HTC’s earnings warning is only one disappointment of many over the last several quarters. While the HTC One’s sleek aluminium design has won plaudits, its launch was delayed by several months due to a shortage of camera components and the company has also been hurt by a wave of executive departures.

Its second-quarter net profit came in at just T$1.25 billion, far below forecasts and followed a record low in the first three months of the year. Its worldwide market share has tumbled to 2.5 percent, compared with a peak of 10.3 percent in the third quarter of 2011, according to research firm Gartner.

Alvin Kwock, an analyst at JPMorgan, said HTC’s small size meant it was unable to compete as Samsung cut prices for its Galaxy smartphones in many markets.

“Even a hero product can’t save them,” he said, adding that a partnership with another firm – a possibility CEO Peter Chou has said he would look at – was one of the few strong options open to HTC.

Although HTC is expected to soon launch the HTC One Mini, Samsung and Apple are also likely to announce their own new offerings later this year. A planned marketing blitz, which includes enlisting Robert Downey Jr. for a reported $12 million to star in its ad campaigns, is expected to weigh on profit margins.

source: interaksyon.com

HTC third-quarter net falls 79 percent, lags forecasts

TAIPEI — Taiwan’s HTC Corp, the world’s fifth-largest smartphone maker, said its third-quarter net profit fell 79 percent, missing forecasts, as its flagship phones failed to keep pace with Apple Inc’s iPhone and Samsung Electronics Co Ltd’s Galaxy range.

The former contract maker has been suffering a sharp decline in its fortunes since the second half of 2011 following a fairytale ride when it built a strong global brand with phones based on Google Inc’s Android software.

Unaudited July-September net profit was T$3.9 billion ($133.17 million), the company said on Monday, down from T$18.68 billion in the same period a year earlier and T$7.4 billion in the previous quarter. It did not elaborate. Earnings had been expected to drop to T$5.57 billion, according to a Thomson Reuters I/B/E/S survey of 21 analysts.

Samsung Electronics reported a record quarterly profit of $7.3 billion on Friday, nearly double last year’s figure, thanks to strong sales Galaxy smartphones as well high-end TVs.

“I expect HTC’s margin was down 2 basis points compared to Q2 due to a change of product mix. HTC was cutting prices and its low-end phones were selling better,” said Yuanta Securities analyst Dennis Chan in Taipei.

“The new models we saw in the past few weeks are not going to change the game. It will be able to keep its market share, but we won’t see much pick-up,” he said.

In the past few weeks, HTC has aggressively rolled out new models to regain market share in the fourth quarter. It released the “HTC J” targeted at the Japanese market last month and the “HTC One X+,” an upgraded version of its high-end flagship model last Tuesday, both running on Google’s operating system.

Last month, it also introduced two colorful models running Microsoft’s Windows Phone 8 software, the Windows Phone 8X and the Windows Phone 8S, among the first in the market.

HTC’s third-quarter revenue was T$70.2 billion. The company said in August it expected its third-quarter revenue to be T$70 billion to T$80 billion, compared to T$91 billion in the second quarter.

HTC shares closed down 0.86 percent at T$287 before the earnings were released, while the broader market fell 0.97 percent.

“Before we turn more structurally positive, we would like to see its flagship models contributing a large portion of its business, as its strategy of reducing its number of models leaves it much in need of a hit model for 2013. Until then, we see margins posing a downside risk,” wrote Goldman Sachs analyst Robert Yen in a research report.

source: interaksyon.com

Smartphone maker HTC sees third-quarter revenue drop, only China to grow

TAIPEI — Taiwanese smartphone maker HTC Corp said on Friday it sees sales growing only in China this quarter while other regions decline, forecasting as much as a 23 percent fall overall in revenue, in a further sign of how tough its road to recovery will be.

The world’s No.5 smartphone maker, once one of the industry’s high flyers but badly hit by competition from Apple Inc and Samsung, sees third-quarter revenue at between T$70 billion and T$80 billion ($2.3 billion and $2.7 billion), compared with T$91 billion in the second quarter.

HTC was expected to earn T$92.51 billion in revenue in the third quarter, according to the median of 18 analysts polled by Thomson Reuters.

“China will continue to see growth in the third quarter, while other markets will have different degrees of decline,” Chief Financial Officer Chialin Chang told an investor conference.

“Europe, Middle East and Africa will face challenges because of macro softness and competition,” Chang said.

HTC, formerly a contract maker, had a fairytale ride in 2010 and early 2011, when its shares more than tripled in the 14 months to April 2011, reaching T$1,238.10. The company’s sales grew four-fold in 1-1/2 years as consumers snapped up its innovative phones with their distinctive large clock numerals.

But it suffered an equally rapid fall from grace as its phones failed to keep up with Apple’s iPhones and Samsung’s Galaxy range. HTC’s shares closed Friday at T$277.50, their lowest in around 2-1/2 years.

Last month, HTC said profit more than halved in the second quarter after European sales disappointed and phones destined for the U.S. market were held up by customs inspections. The results came on the same day that rival Samsung reported record second-quarter operating profit.

MARGINS

HTC on Friday also said it expects a gross margin and an operating margin of around 25 percent and 7 percent, respectively, in the third quarter, falling from 27 percent and 9 percent in the second quarter.

Chang said the lower gross margin is due to falling product prices and a change in product mixes in different markets.

HTC launched its new One series of models in April, banking on their advanced cameras offering photography on a par with traditional digital cameras, as well as music features such as advanced audio technology from U.S. firm Beats Electronics to regain market share lost to iPhones and Galaxy.

However, despite generally good reviews by analysts and tech blogs, sales have not taken off. Nomura noted that HTC has cut the price of One X to 4,999 yuan ($780) from 5,677 yuan in China and U.S. operator AT&T lowered the contract price of the same model to $99 from $199 last month.

“(Cutting prices) in less than three months after its launch, we think is a bad signal as, in the past, HTC has been able to sell 6-12 months before price cuts,” Nomura said.

“We expect competition will become tougher over the next six to nine months, with the new iPhone5 hitting One X and China branded low-price dual core and quad core phones hitting the New Desire model.”

HTC has also been readjusting as it wrestles with declining sales. It has sold back half of the 50 percent stake in Beats it acquired last year, though it will continue to work with the maker of high-end headphones and speakers.

“We have witnessed HTC conducting a series of cost-downs and restructuring in its R&D team recently to lift the bottom line. However, amazing new models and market position are the key growth factors for the company,” said Robert Cheng, an analyst of Bank of America Merrill Lynch in a report.

source: interaksyon.com