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2011-07-06 08:55:30
Taiwanese smartphone maker HTC has reported that its profits more than doubled
in the three months to June on growing demand for its phones.
HTC said it had made a net profit of 17.52bn Taiwanese dollars ($608m; 380m)
in the period, up from NT$8.64bn during the same quarter last year.
On Sunday, the phone maker it had sold record number of phones in June as sales
surged 88% to $1.55bn.
HTC is the world's third-biggest mobile phone maker by market value.
"The second-quarter result was pretty solid," said Bonnie Chang of Yuanta
Securities
"Now the market will wait to see if the guidance for the third quarter can also
beat the street expectation, which is a 5-15% month-on-month growth in sales,"
she added.
Growing competition
Start Quote
HTC needs to have a much better reach, when it comes to distribution and sales
networks
Melissa Chau IDC Asia-Pacific
One of the biggest reasons why market watchers will keep a keen eye on the
guidance for third quarter is the increased competition facing the Taiwanese
firm.
Last month, Goldman Sachs removed the firm from its conviction buy list - a
list of stocks that the investment bank expects to outperform the market -
citing intensifying competition in both the smartphone and tablet markets.
The removal of HTC from the list led to a fall in its share price as investors
became wary of the company's long-term prospects.
However, better-than-expected sales numbers for June released earlier this week
saw the company regain investors' trust and the share price rose again.
Analysts said HTC had been maintaining steady growth and the future looked
bright for the firm.
"I anticipate that they are very well positioned to take their growth story
forward," said Melissa Chau of IDC Asia-Pacific.
Growth concerns
However, Ms Chau said that for the company to be able to maintain its strong
growth it would have to address some key issues.
She said that while HTC had been able to boost its production numbers, it was
lagging behind competition when it came to distributing its phones effectively.
"Some of the other players are much better placed and have had a longer
relationship with service providers," she said.
"HTC needs to have a much better reach, when it comes to distribution and sales
networks," she added.
Ms Chau also added that one of the biggest hurdles that HTC faced was whether
it could develop a successful cheaper version of the smartphone.
She explained that a big chunk of the growth in the smartphone market was
likely to come from the entry level segment, where consumers look for cheaper
high-tech gadgets.
"HTC tried to capture that market with the HTC Smart, but that went nowhere,"
she said.