AT&T Lowers Smartphone Price on Weak Economic Conditions
AT&T (NYSE: T) is expected to slice the price of HTC's One X Smartphone on Monday following poor sales and unstable economic conditions. The regularly $199 priced device will now retail for just $99, contract included.
According to DigiTimes, HTC is only expected to ship nine million phones in its third quarter (to be discussed on August 3 when the company reveals guidance). As revenues approach just over $2.66 billion, AT&T may have decided that marking the phone down by half of its original cost could be just the key to boosting revenues in future quarters.
At a time when the wireless distributor recently experienced positive second quarter results, the HTC development is sure to keep management humbled. Wireless growth was a key component to the company's uplifting earnings call, as Indigo Research claimed earnings per share (EPS) growth was mostly due to increased wireless margins to historically high levels.
While the HTC discount is not the best of recent news to come from AT&T, management revealed on Friday that the company will repurchase up to 300 million additional shares, or five percent of shares outstanding.
“This action allows us to continue returning cash to our shareholders through dividends and buybacks while maintaining a strong balance sheet and investing in the future of our business,” said AT&T Chairman and Chief Executive Officer Randall Stephenson.
As the company surges on, shoppers looking for a discounted smartphone have something to celebrate. The HTC One X Smartphone will be available for 50 percent off beginning today.
AT&T closed Friday at $37.14, up nearly 23 percent year-to-date.
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