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HTC shares fall to a seven year low

Press Release   •   Jul 08, 2013 11:25 BST

Taiwanese mobile phone maker HTC has seen its shares plunge to a seven-and-a-half year low, as its profit continues to slide amid increased competition.

The firm's shares fell 7% on Monday to $189 Taiwanese dollars. On Friday, it reported an 83% drop in profit for the second quarter from a year earlier.

Taiwan's largest smartphone maker, which has seen its stock slump 80% in the past two years, released the HTC One into the US in April, the same month Samsung Electronics Co. put its flagship Galaxy S4 on sale.

New marketing plans and executive changes may help the company rebuild its brand after it fell to ninth in the global smartphone market during the first quarter, with a 2.4% share, according to recent market data, behind Chinese handset makers ZTE Corp. and Huawei Technologies Co.

The firm, which was an early leader in the Android smartphone sector, has lost its market share to rivals such as Samsung and Apple in recent years.

High smartphone penetration rates in developed markets such as North America and Western Europe are leading to slower growth for high-end models.

Though premium models are most profitable for mobile-phone makers in general, they may have to look to cheaper models for growth, targeting emerging markets where growth potentials remain high.

However, HTC is not the only firm that has posted weaker-than-expected earnings.

On Friday, profit estimates issued by Samsung - the world's biggest mobile phone maker - also missed analysts' expectations.

Nokia, which is slated to release second-quarter results on July 18, is attempting to return its smartphone business to profitabilitywith the new Lumia devices, which run on Microsoft Corp.'s Windows Phone software.

But so far Lumias have done little to stem Nokia's decline. Nokia's position in the smartphone market dropped to number 10 in the first quarter.

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