HTC expects third-quarter sales to continue to slide

Taiwan mobile phone giant HTC announced in Thursday that the company's third-quarter revenue is expected to continue to decline, one reason is that Apple's upcoming new generation of the iphone poses a serious threat to it. This will be HTC's 12th consecutive quarterly year-on-year income decline. Zhang Jialin, the company's chief financial officer, said HTC's flagship smartphone HTC One (M8) and other products in the first half of the year increased its second-quarter profit, but sales growth in the third quarter will slow and companies will need to cut marketing spending. Zhang Jialin said that despite the decline in revenue, HTC will continue to profit in the third quarter, with a profit of 0.05 to NT $0.69 per share. Some of our new products are now falling after the initial sales surge. But the good news, says Zhang Jialin to investors, is that sales are now more stable. Zhang Jialin added that, with the help of flagship products and new products, HTC will break its revenue slump for three consecutive years by the end of the fourth quarter of this year. In the next few months, HTC will face even greater challenges. This is because Apple is about to release the next generation of iphones, and Samsung and other rivals will launch new smartphones. At the moment, Apple is trying to make the biggest improvement in the iphone in two years, which means it will become more competitive. HTC said in Thursday that the company's third-quarter revenue was expected to be 42 billion to 47 billion NT dollars (about 1.4 billion to 1.57 billion USD), up from the same period last year. The company also said earnings per share in the third quarter were expected to be 0.05-0.69 NT, less than 2.74 NT dollars in the second quarter. Zhang Jialin said HTC would cut back on long-term marketing spending and adopt a more strategic marketing approach to save on operating costs. But he said HTC would not cut human resources. HTC suffered its first annual net loss last year, mainly because Samsung and mainland Chinese smartphone makers have taken some of their markets. The reason for HTC's decline in market share is partly due to marketing failures. In the second quarter of this year, HTC's profit of NT $2.3 billion, an increase of 84% per cent, reversed the first-quarter loss of NT $1.88 billion. However, the company's second-quarter revenue fell to NT $65.1 billion from NT $70.7 billion a year earlier. Just three years ago, HTC was the world's largest maker of Android handsets. But HTC's market share has fallen sharply in recent years, under pressure from rivals in South Korea and mainland China. According to Jeff Pu, an analyst with Yuanta Financial, a Taiwanese dollar, HTC currently has a global market share of around 2%. (Tan S)