HTC Says 4G Phones To Lift Sales - InformationWeek

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1/21/2011
11:07 AM
Eric Zeman
Eric Zeman
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HTC Says 4G Phones To Lift Sales

HTC told investors that its first quarter sales will be buoyed by a new line of 4G smartphones hitting the market.

HTC had a good year in 2010. Year-over-year, its smartphone sales jumped 111% from 11.7 million to 24.6 million devices. In the fourth quarter of 2010, the holiday shopping season alone accounted for 9.1 million of HTC's yearly sales. Higher sales translated to higher revenue and profits for the company, which jumped 93% and 75%, respectively, when compared to 2009. Can it maintain that momentum? HTC thinks so.

HTC points out that its global brand awareness has quadrupled since 2009, with 50% of the world able to recognize HTC and what it does. It spent 2010 optimizing its global organization, which it says will help it react to changing market conditions rapidly.

Fully 50.6% of HTC's global sales in 2010 came from North America, with Europe contributing 32.2% of sales and Asia and other regions responsible for 17.1% of HTC's yearly sales.

"We continue to see strong demand from existing products and expect recently launched 4G products to help drive shipment growth in 2011," the company said in its quarterly report. "Management expects a relatively muted seasonal slowdown than previous years."

HTC predicts it will ship about 8.5 million devices during the first quarter of the year. That would represent a slight dip compared to the holiday quarter, but an improvement of 157% compared to the year-ago quarter.

HTC debuted two 4G WiMax devices with Sprint in 2010, and has already announced more 4G devices for 2011. At the Consumer Electronics Show, HTC bowed the LTE-equipped Thunderbolt for Verizon Wireless and the HSPA+ Inspire 4G for AT&T. Both devices are set to hit the market later this year and HTC is banking on them to be big sellers.

HTC's competition is not sitting by idly, however. On January 20, Samsung announced that a new 4G version of the Galaxy S is soon to debut with T-Mobile. Samsung has also been making a big fuss about its planned announcements at the Mobile World Congress event scheduled for February.

HTC will also have to worry about the availability of Apple's iPhone 4 on Verizon Wireless' network. HTC enjoyed strong sales of its Droid Incredible through Verizon, but the iPhone's appeal is widespread and many have been waiting for the device's arrival at Verizon. HTC didn't indicate if it took that into consideration when forecasting first quarter sales for 2011.

Motorola is looking for a big first quarter, too. The company plans to launch at least two 4G smartphones (Atrix 4G for AT&T and Droid Bionic for Verizon Wireless) in the first quarter. Both will be strong competitors to HTC's lineup. The Atrix offers some new and interesting features, such as the laptop dock and full Mozilla browsing experience. The Bionic doesn't disappoint either, with one of the healthiest spec sheets around.

Nearly all these devices run Google's Android software. HTC, Samsung, Motorola and others will need to work hard at differentiating their products to make them stand out in the crowd. HTC appears to be confident in its chances.

Among HTC's stated goals for the 2011 calendar year: "Strengthen HTC brand value beyond awareness to build brand preference and emotional connection to HTC. Continue to build HTC brand competency through innovation, user experience, design, technology, marketing, and customer relationship." Based on what HTC built for itself in 2010, 2011 is looking like another banner year for the company.

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