HTC forecasts lower sales in first quarter of 2013

Nathan Andrada – Fourth Estate Cooperative Contributor

New York, NY, United States (4E) – HTC Corp. predicted a decline in sales for the sixth consecutive quarter as the Taiwanese smartphone maker continues to face erosion of market share to Chinese and Korean rivals.

In a statement released today by the Taoyuan, Taiwan-based company, first-quarter revenue is estimated to be at a range between NT$50bn ($1.7bn) and NT$60bn, lower compared to the NT$64.8bn average compiled by Bloomberg in its survey of 19 analysts.

HTC’s guidance also expects profits for the quarter to decline even more with gross margins at 21 to 23 per cent, compared to 23 per cent in the fourth quarter last year. The company forecast operating margin to either stay flat at 1 per cent — as it did in the fourth quarter of 2012 — or drop to 0.5 per cent.

HTC, which held 10.7 per cent of the global smartphone market share in the second quarter of 2011, recorded a 25 per cent fall in shipments last year, according to market data provider IDC.

As rivals Huawei Technologies Co., ZTE Corp. and Samsung Electronics Co. gained more ground, HTC fell out of the top five in the global smartphone market share during the fourth quarter of 2012 with less than 4.3 per cent, according to IDC.

To boost sales and shipments in the second quarter this year, the company will unveil a new smartphone this month, codenamed as M7.

HTC settled a global patent A battle with Apple Inc. in the fourth quarter last year, agreeing to pay the iPhone maker royalty in a deal where terms were undisclosed.

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