HTC 2010 Annual Report Download - page 17

Download and view the complete annual report

Please find page 17 of the 2010 HTC annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 101

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101

32 2 0 1 0 H T C A N N U A L R E P O R T 33
Business Operations
Analysis of Business Results
2010 marked a year of strong growth for HTC. Unit sales
and profit figures hit new highs quarter after quarter.
HTC sold 24.67 million units in 2010 – more than double
the number sold in 2009. Net profits after tax for the
year reached NTD39.5 billion to set a new all-time
record.
2010's remarkable growth in smartphone sales
benefited from strong consumer demand worldwide.
Dedicated to making products that fit the way users
live, work and play, HTC continued to launch a new
stream of flagship products, including HTC Desire, HTC
Droid Incredible, HTC EVO 4G and HTC Wildfire, which
sparked consumer enthusiasm. Unit sales of many of
these models are in the multiple millions, giving rise to
HTC's industry-leading operational performance. Having
long been known to be strong in the middle to high-end
market segments, HTC extended its product portfolio to
the low to mid-end segment in 2010. The mid-tier HTC
Wildfire achieved impressive results during the year
through its powerful combination of social networking
functions and attractive mid-range price point. HTC
Wildfire in particular is selling very well in the youth and
young adult market segments.
HTC has sustained its average sales price (ASP)
while rapidly expanding business volumes through a
successful product portfolio strategy. In US dollar terms,
HTC's 2010 ASP of US$350 was a slight 0.6% below
ASP of US$352 the year before. In NT dollar terms, the
5.4% drop in ASP for the year to NT$11,036 reflected
weakness in the US-to-NT dollar exchange rate.
HTC continues to streamline operations and optimize
cost structures. The slight 1.8 percentage point decline
in our gross profit margin to 30.1% was due primarily
to exchange rate volatility, product mix changes and
market competition. In terms of operating expenses, we
continue to devote significant funds to building value
and recognition for the HTC brand and to strengthening
point-of-sale marketing in our major markets. HTC's
consolidated selling and marketing expense in 2010 rose
to NT$21.8 billion, twice the amount spent during the
previous year. Consolidated operating costs for the
year totaled NT$39.7 billion. Benefiting from economies
of scale, HTC's consolidated operating expense ratio
declined by 0.6 percentage points for the year to
14.3%, which boosted consolidated operating profit
margin (OPM) to 15.8%. Earnings per share (EPS) saw a
robust leap to NT$48.49, up significantly from 2009's
NT$28.71.
Volume (K) ASP (NT$)
11,661 11,036
24,671
0
5,000
10,000
15,000
20,000
25,000
2009 2010
11,711
Gross Margin (%) Operating Margin (%) EPS (NT$)
0
50
45
40
35
30
25
20
15
10
5
2008 2009
33.5 31.9 30.1
19.9 17.0 15.8
37.97
28.71
48.49
2010