Investors on Tuesday punished HTC Corp, the world's
fourth-largest smartphone maker, by sending its shares down to their
daily limit for a second straight day after the company gave a poor
July sales report.
HTC shares fell 6.96 per cent to 240.50 Taiwan dollars (8.03 US dollars). The stock has lost 77 per cent of its value since it peaked in April 2011.
The company reported a sales drop Monday of 45 per cent in July compared with the same period a year ago.
Three days earlier, HTC lowered its forecast for the third quarter, setting a range of 70 billion to 80 billion Taiwan dollars in sales, down 41 to 48 per cent year-on-year.
That news prompted Monday's sell-off when HTC shares hit the 7-per-cent daily limit for trading declines.
Increasing competition in smartphone markets has hurt the Taiwan manufacturer. MediaTek Inc, a Taiwan-based designer of mobile phone chipsets, has developed a line of low-cost chips and spurred a series of cheaper smartphones that are now available, especially in China.
"HTC is squeezed in the middle, with smartphone commoditization being accelerated by MediaTek," Aaron Jeng, an analyst at Nomura Securities, wrote in a research note on July 30.
"What's worse, HTC seems to be losing share in the high-end smartphone space despite launching the One X flagship model both in China and the US."
The One X faces tough competition in the high-end market from Samsung Electronics' Galaxy S III and Apple Inc's iPhone 4, and the expected release of the iPhone 5 later this year would put more pressure on HTC's bottom line.
US-based mobile service provider AT&T Inc cut its contract pricing on the One X to 99 dollars from 199 dollars three months after the phone's launch, according to the Bloomberg financial news agency.
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