HTC vows to step up marketing as revenue set to fall

Taiwanese smartphone maker HTC Corp vowed to step up its marketing efforts to try and meet increasingly tough competition as it forecast another quarter of falling revenue and margins, underlining the challenge it faces to rebuild.

The former contract maker has been suffering a sharp decline in its fortunes since the second half of 2011 following a fairytale ride that turned it from an unknown into a strong global brand with phones based on Google Inc's Android software.

Having fallen victim to the runaway success of Apple Inc and Samsung Electronics Co Ltd, HTC said on Friday it sees around a 14.5 percent fall in revenue in the fourth quarter from the third, worse than analyst forecasts and the second straight quarterly decline this year.

As smartphones continue to migrate to become lifestyle products, how to promote HTC and implement marketing execution is a key priority. We won't stop investing in marketing, Chief Financial Officer Chialin Chang told an analyst briefing.

The company said in a statement it expects its fourth-quarter revenue to be about T$60 billion ($2.05 billion), down from T$70.2 billion in the third quarter and below expectations of T$74.0 billion in a poll of 23 analysts by Reuters.

It expects a gross margin and an operating margin of around 23 percent and 1 percent, respectively, falling from 25 percent and 7 percent in the previous quarter. Chang said the operating margin would be hit by the higher spending on marketing.

HTC said earlier this month its third-quarter net profit fell 79 percent, missing forecasts, as its flagship phones failed to keep pace with Apple's iPhones and Samsung's Galaxy range.

Samsung reported on Friday a fourth straight record quarterly profit of $7.4 billion, largely due to strong sales of its Galaxy smartphones, while Applere ported quarterly revenue that met Wall Street expectations on Thursday while its iPhone shipments were above expectations.

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