HTC to See Revenue Drop in 2009

HTC Corporation announced recently that it expected its revenues for the ongoing year to fall, after it had stated previously that it should see a 10 percent increase. According to the company, some product delays, complemented by lower-than-expected sales on the Chinese market and by bigger-than-expected fall in contract orders, are the main reasons for its revenue drop, WSJ reports.

The new financial expectations point towards a decrease of a low-to-mid-single-digit percentage, which is in contradiction with the earlier increase forecast, while marking a 180 degree turn from the 29 percent increase the company saw last year. “The outlook has softened for the second half of the year, with June being the turning point for HTC as it faced a lot of competition from Apple,” Yuanta Securities analyst Vincent Chen said.

As many of you might already know, HTC is the handset maker that accounts for the largest number of mobile phones launched on the market with Microsoft's Windows Mobile operating system. At the same time, the company is the first maker to release a device powered by Google's Android platform. According to some analysts, it seems that the entrance of other makers into the Android area, including Motorola and Sony Ericsson, is also expected to affect HTC's market share.

According to the mobile phone maker, its third-quarter revenue should be placed somewhere between NT$34 billion and NT$36 billion, lower than the NT$37.86 billion it registered in the third quarter of 2008. “The tougher competition HTC is facing ahead, together with lower retail prices of Google's phones, is causing HTC's average selling price to slide,” Mr. Chen said.

For comparison, during the second quarter of the year, the company posted NT$38.20 billion in revenues, 10.3 percent higher than the same period a year ago. At the same time, the average selling price of its handsets went down to US$358, compared to the US$364 in the first quarter of 2009, and with the US$381 registered in the second quarter the previous year.