HTC suffers shock share value plunge

by Steven Mostyn - Nov 24 2011, 12:32

Mobile device manufacturer HTC may have become the leading provider of Android-driven smartphones in the U.S., but it would appear its retail momentum hasn’t translated into a profit boom or shareholder confidence.

More pointedly, shares in HTC have this week fallen to their lowest point since July of 2010 (down 6.9 percent) after the company buckled amid the global economic crisis and slashed its fourth-quarter revenue forecast.

Taiwan-based HTC has said revenue for Q4 will be approximately the same as during the same period last year, (around $3.4 billion USD), which falls well short of the 20-30 percent growth projection it had initially offered.

According to industry analyst Lu Chialin of Samsung Securities, HTC’s shock plunge is partly rooted in it having “missed out on the new product cycle at the high end of the smartphone market.”

The Hong Kong-based analyst also said HTC’s rapid decline in U.S. sales was a contributing negative, coming—as it did—just when the company became the country’s leading smartphone vendor.

As a result of its revised forecast and having lost a patent-infringement battle with Apple, HTC will apparently now reconsider its $300 million USD acquisition of S3 Graphics Co.

Although Q4 performance has proven a distinct disappointment, and is the first quarter of 2011 that HTC has not posted quarter-on-quarter growth, the company expects a return to growth by the end of Q2, 2012.

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