HTC’s August revenue fell short of the lowered market expectation

HTC’s August revenue fell short of the lowered market expectation
Janitors / Pixabay

HTC Corp (TPE:2498) posted revenue of NT $13.2 billion in August, which is well below market expectation, with a 16 percent month over month and 45 percent year over year decline. HTC Corp (TPE:2498) needs to post 60 percent month over month sale rebound in September, to meet the lower end of its guidance of NT$50-60 billion, according to a report from Credit Suisse by analysts Pauline Chen and Derrick Yang.

HTC's August revenue fell short of the lowered market expectation

September sales to be strong for HTC

Analysts are expecting robust sales in September month fueled by the launch of various new models. New versions of smartphones that will be unveiled in September are One mini (4.3”), One Max (5.9”), and Butterfly S (5.0″). However, unstable profits and sales are the key concerns, believe the analysts.

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Fourth quarter will be loss making

There is hardly any possibility for a fourth quarter rebound for HTC Corp (TPE:2498) as competition in the mid-end segment has reached a new level and more phones are rolling out. Additionally, HTC lags behind in cost structure, marketing resources and branding power. However, operating losses could be lowered in the fourth quarter by better cost management in BOM, but overall it will turn out to be a loss making quarter.

HTC planning OS against Android

In a quest to stand out against Android and iOS, HTC Corp (TPE:2498) is planning to develop a new operating system for the biggest smartphone market China, which is considered to be the largest market for smartphones with a multitude of possibilities. HTC has sensed this and wants to make an exclusive operating system that uses Chinese services like the extremely popular Weibo social network.

According to The Wall Street Journal, HTC has designed two phones with China specific software and the phones have been given to Chines officials.

HTCCorp (TPE:2498) has been in the red for a long time after pioneering the smartphone market based on Android. One of the best phones from the company to date, HTC One, could not do much for the Taiwanese phone maker and sales are trickling down all over the globe. However, in China, HTC is gaining traction as sales are increasing and market share of the company is two times that of Apple Inc. (NASDAQ:AAPL) and one third of Samsung.

Credit Suisse analysts have assigned an Underperform rating to HTC Corp (TPE:2498).

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