* Cuts revenue forecast on product delay, cheaper phones
* Expects to maintain gross margins at around 32 percent
* Revenue fall would lag overall sector growth
* Shares up 36 pct this year vs 54 pct on main board (Recasts with quotes and details)
TAIPEI, July 31 (Reuters) - HTC (2498.TW), the world’s No. 4 smartphone brand, drastically lowered its 2009 revenue forecast on Friday, standing in stark contrast to other Taiwanese tech companies that have given given upbeat forecasts in recent days.
Revenue this year could fall by a low to mid-single digit percent, compared to its previous forecast for growth of about 10 percent, the company said, blaming a delay in the launch of new products and a faster-than-expected fall in unit shipments.
“Our momentum in the second half of this year may not be as strong as we initially thought it would be,” HTC’s Chief Executive Peter Chou said during a call with analysts.
“The number of mid-tier smartphones we’re pushing out this year will gradually increase, which will push down revenue. Momentum on both the Windows Mobile and Android platforms are also turning out to be weaker than expected.”
The announcement came after the market close, with HTC shares ending down 0.1 percent in a broader Taiwan market .TWII up 0.7 percent.
HTC’s downward revision of its revenue forecast for this year will also mean it is severely lagging overall growth in the sector, with research firm Gartner expecting the number of smartphone users to rise by over 30 percent from 2008.
HTC will also raise its operating budget this year to above 15 percent from 13.5 percent previously, as it embarks on an expanded marketing campaign to compete against industry stalwarts such as Nokia NOK1V.HE and Apple’s (AAPL.O) iPhone.
It also said it expects gross profit margin in the third quarter and the full year to clock in at about 32 percent, in line with its previous guidance even amid increasing competition in the smartphone sector.
Many analysts expect profit margins at smartphone makers such as HTC, Blackberry maker Research in Motion RIM.TO and Nokia NOK1V.HE to come under pressure as PC makers such as Acer (2353.TW), who are used to lower margins, enter the field.
“There were already some early indicators of this when we saw lots of new models in the second quarter but no growth in revenue,” said Pranab Sarmah, head of technology research at the Daiwa Institute of Research.
“When a company is introducing so many new models but not seeing any revenue growth, that’s going to impact its cost structure and hurt things.”
Investors have been relatively bearish on the company this year, with HTC’s shares having risen about 36 percent so far, far lagging the 54 percent advance on the TAIEX share index. (Reporting by Kelvin Soh; Editing by Lincoln Feast)