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HTC Forecasts Weak Q2 Earnings Despite New Models

HTC Forecasts Weak Q2 Earnings Despite New Models

By Agence France-Presse | Updated: 28 April 2015 19:13 IST

HTC on Tuesday forecast lower-than-expected revenue in the second quarter after a disappointing launch of its new model, as the smartphone maker struggles to compete with major rivals like Apple and Samsung.

HTC predicted sales of between TWD 46 billion and TWD 51 billion ($1.35 billion and $1.65 billion) in the three months to June. That is up from TWD 41.52 billion in the previous quarter, but down up to 30 percent from TWD 65.06 billion a year ago.

The figures prompted analysts to lower their outlook for the company, despite the launch of its HTC One M9 in Taiwan last month after a week-long delay due to a software upgrade.

"They said their operations in the third quarter would be better than that of the second quarter, but I don't know how that could happen," said Jeff Pu, analyst at Yuanta Securities Investment Consulting, who had predicted second-quarter sales of TWD 62 billion.

"Demand for the flagship machines has been weak," Pu said, adding that a big chunk of its sales came from the low-tier gadgets.

Once the star of the intensely competitive smartphone sector, HTC has seen its fortunes collapse as Samsung, Apple and strong Chinese brands like Lenovo and Huawei have surged ahead.

Last week it reported net profit of TWD 360 million in the three months to March, lower than TWD 470 million in the previous quarter but up from a loss of TWD 1.88 billion a year earlier.

HTC swung to its first net loss since listing in the third quarter of 2013, as it slipped out of the world's top 10 vendors.

Last year's launch of the popular HTC One (M8) model created a fresh buzz around the brand, but analysts have warned that it still has a long way to go before regaining lost ground.

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