[China] Yoshida in China: Leveraging one billion smartphones


China has a plan. Well, since when hasn’t China had a “national plan”? Lately, the Chinese planning fixation is aimed at anything that might pose a hindrance to the nation’s new economic growth engine. The latest example is China’s effort to conquer its increasing urban traffic congestion by developing an intelligent transport system (ITS).

The idea of offering traffic management services through ITS is not new. You want a user to see — just by looking at his mobile phone — how close is the cab he ordered, or how long he must wait for the next bus.

The difference with China’s ITS ambitions is the government’s focus on a billion mobile phone users in the country.
China is refining ITS applications for smartphones – applications meant to help users transfer between trains, buses and planes. Last week, the Ministry of Transport in China unveiled a national plan for the transportation sector in 2012-20, aiming to promote ITS development and fostering more private investment.

Traffic jams are a serious issue. Some forecast that the number of vehicles in China will exceed 200 million in 2020.

HTC: Not exactly a falling sky, but…

HTC, the world’s 4th largest smartphone manufacturer (in terms of units, by IDC; see the table below), told its shareholders last Friday that it expects to post sequential decreases in both sales and gross margin in the third quarter.

HTC reported second-quarter consolidated revenues of NT$91.04 billion (US$3.04 billion), in line with its targeted NT$91 billion, which had been cut from an original target of NT$105 billion. Gross margin and operating margin for the second quarter came to 27.01% and 9%, respectively.'

Troubling is a dwindling pattern for HTC’s numbers when compared to those of a year ago. Second-quarter sales represented a 34.3% increase, but were 26.8% lower than those posted in the second quarter a year ago. Meanwhile, gross margin and operating margin showed improvement from the prior quarter, but decreases compared to the same period of 2011.

HTC generated net profits of NT$7.4 billion, or NT$8.90 a share, in the second quarter of 2012. Profits declined more than 50% from a year earlier, but rose more than 60% between quarters.

Things aren’t exactly looking up for HTC, either. HTC estimated third-quarter sales at NT$70-80 billion. Gross margin and operating margin are forecast to reach 25% and 7%, respectively.


Source: EETimes