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HTC forecast to post 50% sales growth in Q2

TAIPEI--Taiwan-based smartphone vendor HTC Corp. is expected to enjoy sequential sales growth of up to 50 percent in the second quarter because of the launch of its new flagship model and its ambitions to penetrate mid-range markets, an advisory firm has said.

In a recent research note, KGI Investment Advisory said the latest HTC One M8 and the mid-range HTC Desire 816, which were unveiled last month, should help the smartphone vendor's sales increase 40-50 percent in the second quarter.

KGI said the significant recovery in sales should also enable HTC to turn a profit in the current quarter after its gross margin improves.

At an investor conference on Feb. 10, HTC anticipated its consolidated sales for the first quarter to range between NT$34 billion (US$1.12 billion) and NT$36 billion, down from NT$42.9 billion in the previous quarter.

Because of the decline in sales, HTC projected a loss per share for the quarter of NT$2.1 NT$2.6, compared with NT$1.21 in earnings per share in the previous quarter.

In the first two months of 2014, HTC's consolidated sales only totaled NT$16.9 billion, well off the pace of its first quarter revenue target.

But analysts said the HTC Desire 816 has been warmly received in China, and the new flagship HTC One M8 could attract fresh buying in the high end market, which could help HTC meet its first quarter guidance.

HTC has yet to release its March sales data.

KGI said the HTC Desire 816 carries a price tag of 1,799 Chinese yuan, or about NT$9,000 (US$297), which represents a competitive price in China's big mid-range market.

The advisory firm said the budget model, equipped with a 13 megapixel rear lens and a 5 megapixel front lens, has enjoyed strong sales since it was launched in China in early March. HTC said it will introduce the HTC Desire to Taiwanese consumers shortly.

For the 5-inch HTC One M8, which was unveiled in late March, more than 230 telecom services providers and distributors around the world have signed on to sell the model, exceeding the 185 that cooperated with the Taiwanese vendor to sell its previous flagship model in 2013.

KGI saw the increase in distribution as a development that could boost the new model's global visibility.

Meanwhile, according to sources from distribution channels in Britain, HTC is planning to launch a smaller version of the M8 model with a 4.5-inch display in May. The smartphone supplier has declined to comment on the speculation.

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