After struggling throughout 2009, mobile phone maker HTC is eyeing an upturn in sales this year, though profit margins are still likely to be down.
Earlier this month, HTC announced a 31 percent drop in fourth quarter 2009 earnings to 5.6 billion Taiwan dollars ($175 million) from 8 billion ($250 million) in 2008's final quarter. Sales fell 13.2 percent to 41 billion Taiwan dollars ($1.28 billion) from 47.3 billion ($1.48 billion) the same quarter in 2008. Results were reportedly hurt by heavy spending on marketing as HTC aggressively tried to promote itself and its smartphones in both the U.S. and Europe.
In a conference call with analysts on Tuesday, HTC took a more optimistic tone for 2010. For the first quarter of 2010, HTC is looking for sales to rise around 7 percent from last year's first quarter, reaching between 32 billion and 34 billion Taiwan dollars ($997 million to $1 billion). Revenues will likely be volatile and bottom out in February as older products transition to new ones. But as the new smartphones take off, sales should gain momentum in March.
Though sales may bounce back this year, HTC acknowledged that its profit margins would be lower than in 2009 as it launches an array of new phones and tries to beat the competition on price.
The company touted its partnership with Google in co-designing the new Nexus One, anticipating that the new smartphone will create buzz and drive growth for HTC and the Android platform. But at the same time, HTC remains firmly in the Microsoft camp by aggressively supporting and promoting Windows Mobile. The company is hoping both platforms together will strengthen its presence and sales in the sluggish European market.
To boost overall revenue this year, HTC is hoping for robust sales from a variety of new smartphones. High on the list of expectations is HTC's new HD2 smartphone, scheduled to be released for the U.S. market by T-Mobile this spring. Running Windows Mobile, the HD2 will be HTC's first Windows Mobile phone to offer the Sense user interface, a touch screen that can be customized according to user preferences. The interface has already surfaced on HTC's Android-based Hero phone.