HTC hopes action camera will be hot

HTC released an action camera, its first consumer electronics device, as the company moves into new products to reduce its reliance on falling smartphone sales.

Named “Re,” the waterproof camera is on sale for $199 at the company’s website and Best Buy stores in the U.S. before being carried by wireless operators and Amazon by the end of the year, Taoyuan, Taiwan-based HTC said in a statement.

Unveiled at an event in New York, the device features a wide-angle lens and 16-megapixel sensor, and will compete with GoPro and Sony for sales of action cameras, a market forecast to grow 16 percent annually through 2018.

Stiffer competition and a decreasing marketing budget resulted in HTC posting 12 consecutive quarters of declining sales, consistently missing analyst estimates. Once the largest smartphone supplier in the United States, HTC last year created an emerging devices unit as part of Chairwoman Cher Wang’s plan to broaden the company’s product focus.

“This is the first time we have introduced something significant beyond the smartphone, and we want to see a continuation of that,” said Chang Chialin, chief financial officer and head of global sales, from New York. Wireless connections to smartphones and a planned cooperation with Youtube will allow the camera to live-stream directly to Google’s video-sharing site, Chang said.

Major European markets as well as India and Australia will get the device by the end of the year, Chang said. He declined to provide sales targets, gross margin details or say which company assembles the device.

A mobile application for Android and Apple smartphones will also be released soon, allowing images from Re to be sent to users’ phones.

Also released at the New York event is a new smartphone called HTC Desire Eye, which the company says is designed for self-captured photos, or selfies. The device has 13-megapixel cameras on both the front and back as well as three microphones.

Mike Woodward, the HTC executive appointed to lead the new emerging devices division, left the company about a month ago to take a senior role at Amazon, he said.

Global shipments of action cameras, defined as those with high-definition sensors used for sports photography, may climb by an average of 24 percent annually from 2014 to 2018, with sales to increase 16 percent a year as prices fall, Sandler Research said in July. Worldwide smartphone shipments may climb by an average of 12.7 percent over the same period, according to IDC.

Last week HTC announced that its revenue fell to NT$41.9 billion ($1.38 billion) in the third quarter, missing the company’s forecast of NT$42 billion to NT$45 billion. Sales have dropped every quarter since 2011 and have missed estimates 13 consecutive times.

HTC’s operating profit of NT$160 million missed the NT$222 million median of 17 analyst estimates compiled by Bloomberg. The operating income indicates it had a non-operating profit of NT$480 million, likely from foreign exchange and disposal gains, said Calvin Huang, an analyst at SinoPac Financial Holdings in Taipei.

HTC’s mid- and low-end phones released in China have been facing competition from devices by Xiaomi and Huawei Technologies, while the introduction of Apple’s iPhone 6 models attracted high-end buyers. Sales and profit probably will drop again in the fourth quarter, analysts estimate, while the company plans to release its first action camera and a tablet computer developed for Google.

“In China, you have Xiaomi and Huawei and a whole bunch of cheaper handsets with quite good performance, while in the States you have the iPhone,” Birdy Lu, at Deutsche Bank in Taipei, said. “From a share price perspective, it might not fall off too much from here because there’s already no expectation for the stock.”

HTC planned to manage costs, including a “streamline” of marketing expenses, to help its earnings, Chang Chialin, chief financial officer and director of global sales, said.

Bloomberg