Surf Taiwan News, Browse the World »
HTC vulnerable to Chinese operators' subsidy cut: Morgan Stanley
Central News Agency
2014-08-18 06:08 PM
Taipei, Aug. 18 (CNA) Taiwanese smartphone maker HTC Corp. might see its sales in China adversely affected by moves by Chinese mobile operators to adjust their cash subsidy policy for handsets, Morgan Stanley said in an analysis released Sunday.

In July, Chinese authorities told China's three state-owned wireless carriers to cut promotional spending by a combined 40 billion Chinese yuan (US$6.5 billion) in three years because of overspending on subsidies and advertising for mobile devices, according to foreign media. China Mobile Ltd., the nation's biggest wireless carrier, told investors earlier this month that its handset subsidies would be lowered to 6 billion yuan in the second half of 2014 from 15.6 billion yuan in the first half. "We believe the new policy could lengthen the handset replacement cycle, thus reducing the total pie," Jasmine Lu, a Morgan Stanley analyst in Taipei, said in a research note on Sunday. She said there could be a market share shift among handset makers, which will need to boost their brand image and expand their retail channel network to gain more volume. "Those handset OEMs that rely on operator channels will likely be adversely affected (in the) long term (if they do not) diversify their channel focus," Lu said. She believed that premium brand Apple might be less affected by the new policy and said Xiaomi could also be less vulnerable because it sells most of its products online. In contrast, non-Apple global brands like Samsung and HTC, as well as Chinese OEMs that rely on operator channels such as Coolpad, Lenovo, Huawei and ZTE, might be more poorly positioned in light of the subsidy cut, the analyst forecast. HTC shares closed up 0.79 percent at NT$128.0 (US$4.28) Monday in Taipei. (By Jeffrey Wu)

HOME |  WORLD |  Politics |  Business |  Sports |  Lifestyle |  TAIWAN |  Technology |  Health |  SUPPLEMENT |  Society |  OPINION
  • Taiwan News  ©  2014 All Rights Reserved.