In view of the strong competition from Apple Inc and Samsung Electronics Co in developed markets, HTC Corp (宏達電) has been turning to emerging markets such as Myanmar, but analysts say the Taiwanese company still faces major challenges in the global market.
The company has opened a store in Yangon in a bid to gain a foothold in the untapped Burmese market.
However, IBTS Investment Consulting Co (IBTSIC, 台灣工銀投顧) analyst Albert Chen (陳振鈞) said by telephone yesterday that the move was unlikely to help the Taiwanese company compete against its US and South Korean rivals.
“Myanmar is a small-scale market where HTC can find few opportunities to expand its global market share,” he said.
“In addition, because Myanmar lacks the advanced telecommunications infrastructure needed to support 3G or 4G LTE mobile networks, the smartphone penetration rate is low there,” Chen added.
While Myanmar’s GDP has grown at a rate of more than 10 percent since 1999, the nation’s GDP per capita based on purchasing power parity was as low as US$1,300 in 2011. Consequently, the mobile phones used by Burmese are mostly low-end models rather than high-end ones.
Chen said HTC’s strategy to make inroads into Myanmar might be helpful, but will not be enough to secure its ranking in the market and improve its corporate image.
“What HTC needs to focus on now is sustaining the sales momentum of its new HTC Butterfly model in Taiwan and Japan. Developing a solid high-end smartphone that can generate brisk sales and shortening its product cycle are more of effective solutions for HTC than breaking into emerging markets,” he said.
Fubon Securities Co (富邦證券) equity research analyst Jeff Pu (蒲得宇) forecast that HTC’s shipments to emerging markets would grow by 50 percent this year, thanks to high demand for its low-end smartphone models.
Shipments to China are expected to increase to 9.1 million units this year from 6.3 million units last year, while shipments to other emerging markets would increase to 21 million this year from 15 million last year, Pu said by telephone.
HTC is likely to launch its Butterfly model in China by the end of this month with a price tag of less than 3,000 yuan (US$482), he added.
As for the company’s Myanmar push, Pu said he was reserved about the move.
“It will take time to see whether the county’s smartphone market or penetration rate will grow at a fast pace or not,” he said.
Fubon reiterated its NT$330 target price for HTC, which climbed 5.1 percent to close at NT$291 in Taipei trading yesterday.