Windows 8 not a savior for HTC: Morgan Stanley
CNA 2012-09-10 15:48 (GMT+8)
HTC should not expect to scramble back into a dominant market position with Windows-based products, says analysts at Morgan Stanley. (Photo/Fang Chun-che)
Taiwanese smartphone maker HTC is unlikely to revive its market position with its new devices operating on the Windows Phone 8 (WP8) system due to HTC's inability to differentiate its hardware, US brokerage Morgan Stanley said in a recent note.
HTC is expected to launch its first devices running on Microsoft's WP8 on Sept 19 in New York, as well as a Windows 8 tablet or a 5-inch Android smartphone.
Media suggested that HTC's first WP8 smartphones may look similar to rival Samsung's Atvi S, sporting 5-inch LCD displays, dual-core processors, integrated near field communication (NFC) technology and HSDPA/Wi-Fi wireless connectivity.
"In terms of hardware specifications, we think it will be difficult for HTC to regain shares quickly aided by Windows 8-based smartphones given less differentiation except pricing," said Jasmine Lu, a Hong Kong-based analyst at Morgan Stanley.
"We think the winning formula has shifted from technology to scale, marketing and branding," she wrote in the research note.
The opportunity for WP8, Lu stated, lies in the United States if wireless operators decide to embrace WP8 as the third ecosystem other than the ones led by Google and Apple more aggressively to diversify their risks in view of the ongoing legal dispute between Apple and Samsung.
According to research firm Gartner Inc, Windows will capture a 10.4% share of the global smartphone operating system in 2013, up from only 3.9% this year.
Further, the share of Google's Android operating system will slide from the dominant 60.3% this year to 57.9% next year, while Apple's iOS will increase from 22.0% to 23.1%, Gartner forecast.
Meanwhile, HTC reported on Sept 7 that it had consolidated August sales of NT$24 billion (US$808.8 million), down 4% from July and down 47% year-on-year.
Morgan Stanley analysts believe HTC's sales in the third quarter could total NT$74.7 billion (US$2.51 billion), in line with the Taiwanese vendor's own expectations of NT$70 billion (US$2.35 billion) to NT$80 billion (US$2.65 billion).
"We read the weak sell-through in Europe and the US as being due to the upcoming Apple iPhone 5 launch, as well as stiff competition from Samsung," Lu added.
Further, the brokerage maintained its "underweight" stock rating on HTC and its target price of NT$194 (US$6.54), given HTC's lackluster third quarter and a likely muted fourth quarter amid severe competition.
Shares in HTC gained 3.15% Friday to close at NT$262 (US$8.82) in Taipei trading.
