HTC counting on twin strategy to win in China

Staff writer, with CNA

Thu, Sep 26, 2013 - Page 13

HTC Corp (宏達電) is aiming to grab a 20 percent share of China’s high-end market with its introduction of two flagship smartphones, company chairwoman Cher Wang (王雪紅) said.

“It shouldn’t be a problem,” Wang said, referring to the 20 percent goal, in an interview that was published on Tuesday on the Chinese news site Sina.

Wang did not give a timeframe, but said she was confident of reaching the target mainly because of HTC’s “double flagship” strategy in China.

The company is seeking to improve its brand image among customers in China with sales of its HTC One and HTC Butterfly series of smartphones, she said.


Although the two smartphone series are classified as HTC’s top-of-the-line products, they are aimed at different market segments and should help boost HTC’s business in China, Wang said.

The Taoyuan-based company saw its smartphone market share in China decline from 8 percent in the first quarter of last year to 7.1 percent in the second quarter of this year, according to an Aug. 16 report by Avanti, a division of the research company TrendForce.

However, HTC’s brand awareness among Chinese consumers improved from 23 percent to 28.4 percent during that period, trailing behind only Apple Inc (80.6 percent) and Samsung Electronics Co (79.6 percent), the report said.

Some analysts expect HTC to be hurt by Microsoft Corp’s recent acquisition of Finnish phone vendor Nokia Oyj’s handset business, but Wang said the partnership between HTC and Microsoft on Windows phones remains intact.

“We have always maintained a good relationship with Microsoft and we were the first company to be informed of the deal,” she said. “From Microsoft’s perspective, they are hoping HTC will continue working with them. Let’s wait and see how the cooperation develops.”

Asked about a Wall Street Journal report that HTC is developing a mobile-software system for Chinese consumers, Wang said the company “has no such plans at the moment.”


In related news, HTC declined to comment yesterday on a report that the company is facing a shortage of the downsized version of its HTC One flagship device.

The shortage of the HTC One mini, a 4.3-inch smartphone launched two months ago, was due in part to “a casing shortage arising from design difficulties,” Reuters reported on Tuesday, citing an anonymous source.

That has left HTC unable to meet consumer and telecom operator demand for the phone, another source told Reuters, increasing the possibility that the company could post its first net loss in the current quarter.

In an e-mail reply to CNA, HTC said: “We don’t comment on rumors or speculations.”

Calls to Taiwanese smartphone distributors yesterday morning found that the HTC One mini was available on the spot, but it was not clear if there were shortages in overseas markets.

Many market analysts believe HTC will fail to reach its third-quarter sales target of NT$50 billion (US$1.69 billion) to NT$60 billion, as the company continues its efforts to clear inventories of old stocks.

HTC shares closed down 3.57 percent at NT$135 yesterday. The stock has lost nearly 90 percent of its value since its peak in April 2011.