HTC Lowers Revenue Forecast - InformationWeek

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7/31/2009
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HTC Lowers Revenue Forecast

The smartphone maker is feeling the heat from a downward trend in handset pricing and from China's delay in rolling out its 3G network.

The company, which makes popular handsets like the T-Mobile G1 and the Touch Diamond, said revenue this year could dip by a single-digit percent, and it had previously forecasted growth of about 10%.

"Our momentum in the second half of the year may not be as strong as we initially thought it would be," HTC CEO Peter Chou said during a conference call. "The number of mid-tier smartphones we're pushing out this year will gradually increase, which will push down revenue. Momentum on both the Windows Mobile and Android platforms are also turning out to be weaker than expected."

Chou did not specify which handsets would be delayed, as the company has already brought out high-profile handsets like the Touch Diamond 2, Touch Pro 2, and the Android-powered Hero. The company had previously said it would be making a stronger push with Android, but it has not announced new handsets yet.

The smartphone maker said China's delay in rolling out the 3G network is hurting demand, and it is also feeling the heat from a downward trend in smartphone pricing. HTC's average selling price per handset declined from $364 per unit in the first quarter to $358 in the second.

Part of the pricing pressure can be blamed on Apple, as it essentially set the price point for a high-end smartphone with the $199 cost of the iPhone 3GS. The company also cut the price of the popular iPhone 3G to $99. Additionally, computer makers like Acer are jumping into the smartphone market, and these companies are used to lower margins.


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