HTC cuts forecast by 23 percent, blaming everyone else but themselves

| Wednesday, November 23rd, 2011


HTC has notified investors of a revenue forecast cut that could reach 23 percent in the upcoming quarter. This means the original estimation of $4 billion will actually be closer to $3.4 billion:

[quote]Fourth-quarter revenue will be approximately the same as a year earlier, when it was NT$104 billion ($3.4 billion), the Taoyuan, Taiwan-based company said in an exchange statement today. Last month, HTC forecast sales to range between NT$125 billion and NT$135 billion. Sales will slow quarter-on-quarter for the first time in almost two years.[/quote]

The Taiwanese smartphone maker is quick to blame the economy’s dramatic downturn for their struggles, though HTC appears to contradict that claim by pointing out strong sales from Apple and Samsung. HTC is also reevaluating the purchase of S3 Graphics, a move that was rumored to be a defense tactic against patent suits being filed by Apple.

[quote]The loss in a patent-infringement case the company brought against Cupertino, California-based Apple at the U.S. International Trade Commission prompted the reevaluation of the S3 Graphics purchase, HTC said in a separate statement today.[/quote]

So what is it? A poor economy, stronger competition, both, none? It certainly doesn’t look like the economy, or competition, is stifling sales at Apple, who is consistently listed as “out perform”, or other Android handset makers right now. There’s always RIM, but at this point, it’s pretty obvious what their problem is these days.

Bonnie Chang of Yuanta Securities Co. listed HTC as a hold prior to this announcement, and points out that HTC has lost its luster:

[quote]“HTC doesn’t have the same sparkle, lacking both the design and marketing of Samsung, while they’ve declined to go into the low-end phones which are popular in China.”[/quote]

HTC has gained the title of number one smartphone manufacturer based on US sales, but analysts have been reporting that HTC’s own close-mindedness have stifled the company’s growth. Things should get interesting in the next couple of months for HTC.

Source: Bloomberg

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