March 14 (Bloomberg) -- Sales of Sky-Mobi Ltd., a Chinese provider of mobile-phone applications, will be unchanged in the fiscal year ending March 31, 2013 as the market for lower-end feature phones shrinks, Chief Financial Officer Carl Yeung said.
China has sold about 300 million mobile devices in the past 12 months, of which more than 90 percent were feature phones, Yeung said in an interview at Bloomberg’s headquarters in New York. The situation will change this year as sales of smartphones, which have computer-like capabilities for running software and accessing websites, may rise to about 30 percent of the mobile-phone market, he said.
Sky-Mobi will benefit from increasing sales of smartphones starting from September this year, Yeung said. Contributions from smartphone applications to revenue will become “significant” in 2013, he said.
Revenue for the quarter ended Dec. 31 rose 3.8 percent from the same period a year ago to 167.3 million yuan ($26.6 million), Sky-Mobi, based in Hangzhou in China’s eastern Zhejiang province, said in a Feb. 15 statement. Net income dropped 96.6 percent from a year ago to 6.4 million yuan.
American depositary receipts of Sky-Mobi slid 0.5 percent to $3.93 by 1:03 p.m. in New York, dropping for the first time in five days. The ADRs have risen 29 percent this year after losing 43 percent in 2011.
Allegations in May last year against Sky-Mobi by Citron Research “definitely hurt shareholders,” Yeung said.
Citron said in a May 3 report that the company didn’t have the market position they claimed as the biggest mobile-application store in China, that average revenue per download had slumped and that more than 80 percent of registered members are inactive.
The claims, which Sky-Mobi says are untrue, were “a destroying thing,” Yeung said. While it’s good to uncover fraudulent companies, should it be shown that the people making the allegations are “just trying to shoot in the dark” it can be damaging, he said.
Sky-Mobi’s ADRs are down 70 percent since May 3 last year.
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