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1080p Screens To Become Standard in 2013 – So Says Barclays Bank

November 27, 2012 - Written By Kody Frazier

Barclays Bank, the UK-based bank responsible for a large portion of commercial funding around the world, recently released an analysis of the upcoming line of HTC devices worldwide. In the analysis the bankers noted that they believe the standardization of mobile devices to the 5-inch 1080p format will likely occur in mid-2013, thus eliminating any competitive advantage by those companies who spearheaded the movement.

The report focused on the upcoming 5-inch display smartphones from HTC – the Droid DNA in the US and J Butterfly in Japan –  and stated that they believe the new model will lead the worldwide market as the quality leader for 1080p devices for 3 to 6 months, but after that their advantage will likely disappear. Barclays warns that HTC will have a very small window of opportunity to push their new flagship devices before competitors offer similar or better products in the same markets. While this doesn’t sound particularly different from a regular phone cycle, it’s important to note how much is riding on this model for HTC. Current financials are looking poor, especially compared to their primary competitor, Samsung Mobile.

Barclays predicts that HTC will ship 8.8 million smartphones in Q1 of 2013.  That’s an increase of 1.8 million over Q4 of 2012, which is a solid increase but it’s unlikely that they will continue to see that type of growth. Analyst, Dale Gai of Barclays pegged their stock price at NT$175 (US$6) and put them under the “underperform” ranking.

The three major concerns for investors are probably no surprise to industry analysts, as they focus primarily on HTC’s ability to compete with Apple, Samsung, and low-cost leaders in the Chinese market. Apple is expected to introduce a low-cost strategy to China in 2013, and the recent decline in sales of devices in the 1,000 – 2,000 yuan range in China may force HTC to slash prices and profit margins. Also, Samsung is expected to start pushing its AMOLED screens onto mid-range devices in 2013 as well, cutting into HTC’s grip on consumers simply looking for a quality display.

Dale Gai also had this to say about HTC’s upcoming year:

“We (see) better-than-expected (HTC) sales and margins in the first half of 2013 on new product launches, including the 5-inch Butterfly models and the next-generation models to be announced at the Mobile World Congress.”

“However, we are still cautious on the second half of 2013, expecting competition to be intensified from Apple, Samsung and China brands, leading to erosion (in) average selling prices.”

Source: Focus Taiwan