DGAP-News: Vtion Wireless Technology AG: Company Exits Consumer Tablet PC Business
(firmenpresse) - DGAP-News: Vtion Wireless Technology AG / Key word(s): Miscellaneous
Vtion Wireless Technology AG: Company Exits Consumer Tablet PC
Business
14.12.2012 / 07:56
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Vtion Wireless Technology: Company Exits Consumer Tablet PC Business
Frankfurt, 14 December 2012. Vtion Wireless Technology AG, one of the
leading suppliers of wireless data solutions for mobile computing in China,
announces the discontinuation of its consumer-oriented tablet PC business.
This business accounted for approximately 15 per cent of Vtion's revenues
for the first nine months of 2012. The reason for the decision was the
increasing pricing competition in the consumer tablet PC market, resulting
in margin pressure negatively affecting the company's overall
profitability. Vtion's decision to exit this business was made for the
benefit of the company's overall profitability.
Changes in the Consumer Market
An increasing number of low-end tablet PC suppliers have entered the market
as the overall Chinese tablet PC market continues to grow. The resulting
pricing competition in the consumer space has put pressure on Vtion's
margins. Though the company has an established brand vis-à-vis the telecom
operators, its lack of brand recognition among consumers means the company
cannot charge a significant premium for better quality. Thus, while
continuing to supply tablet PCs as part of the industry-specific computing
solutions business segment, the company will exit the consumer space
beginning January 2013. Consumer tablet sales thereafter will be aimed at
selling off inventory.
'When we began this business we had high hopes for the tablet PC consumer
market,' states Vtion CEO Chen Guoping. 'Though we were successful in our
attempts to differentiate through pre-installed apps for targeted consumer
groups, an increasing number of low-end providers entered the market, some
of which compete at gross margins as low as five per cent. This had the
effect of driving down prices in the overall market for all but the
absolute top brands. In light of this, we have decided to close the
business, because it is more important for us to maintain our strong
profitability even if it comes at the expense of the top line,' he
concludes.
Business Model Going Forward
For the first nine months of 2012, Vtion's tablet PC sales in the consumer
space accounted for approximately 15 per cent of total sales. Exiting this
business will have a corresponding effect on the company's revenue for
2013. According to CEO Chen Guoping, 'The hardware business in China is
quite difficult overall. However, we are still successful in the wireless
data terminal segment because of our solid foundation and brand recognition
in that area. Lacking a true consumer brand, we have made this decision in
the interest of our overall profitability.' Over the long-term Vtion will
move towards a more software and services-centric business model through
industry specific computing solutions and mobile applications. However,
these businesses are still in their incubation phase and unlikely to
contribute significantly to the company's financial results in the near
term. Nevertheless Vtion expects stable results in the wireless data
terminal business segment while it continues to build up the newer
businesses.
Vtion currently sells mobile applications designed for the usage by
traveling insurance sales personnel. The company is also exploring further
industries in which it can develop customized applications. Through its
wholly-owned subsidiary, Vtion Anzhuo, the company is also active in the
mobile applications space, working exclusively on the Android operating
system. The company currently offers over 20,000 applications through its
online sales channels.
About Vtion
The Vtion Group is a leading supplier of wireless computing solutions and
products for mobile Internet access via broadband wireless networks in the
People's Republic of China. The company offers tablet PC products and
support services through its mobile intelligent terminals business segment,
including both to the consumer market and industry-specific clients.
Through its wholly owned subsidiary, Vtion Anzhuo, the company offers
online applications for the Android operating system. For 2011, the company
reached sales revenues of EUR 77 million with an EBIT margin of 10.3 per
cent. Vtion Wireless Technology AG shares are being traded in the Prime
Standard on the Frankfurt Stock Exchange with the ISIN DE000CHEN993. The
company's ticker symbol is V33.
For further information, please contact:
Kirchhoff Consult AG
Dr Kay Baden, tel.: +49 40 60 91 86 0, baden(at)kirchhoff.de
or visit the company website at: www.vtion.de
Disclaimer concerning prognoses
This communication contains forward-looking statements. Forward-looking
statements are statements that are not historical facts instead they
reflect Vtion's current views and expectations and the assumptions
underlying them about future events. Forward-looking statements are subject
to many risks and uncertainties. If any of such risks and uncertainties
materialise or if the assumptions underlying any of Vtion's forward-looking
statements are proving to be incorrect, Vtion's actual results may be
materially different from those expressed or implied by such
forward-looking statements. Vtion does not intend or assume any obligation
to update these forward-looking statements. Any forward-looking statement
speaks only as of the date on which it is made.
End of Corporate News
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14.12.2012 Dissemination of a Corporate News, transmitted by DGAP - a
company of EquityStory AG.
The issuer is solely responsible for the content of this announcement.
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Language: English
Company: Vtion Wireless Technology AG
Westhafenplatz 1 (Westfalen Tower)
60327 Frankfurt
Germany
Phone: +49 69 710 456 245
Fax: +49 69 710 456 248
E-mail: ir(at)vtion.de;yasmin.yaqub(at)kirchhoff.de
Internet: www.vtion.de
ISIN: DE000CHEN993
WKN: CHEN99
Listed: Regulierter Markt in Frankfurt (Prime Standard);
Freiverkehr in Berlin, Düsseldorf, Hamburg, München,
Stuttgart
End of News DGAP News-Service
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