“Brand” and “scale” were again the two most repeated words during HTC Corp’s (宏達電) investor conference on Thursday. After launching lower-priced smartphones and repositioning its brand late last year, HTC had proven to investors its brand awareness and scale were enhanced in just two quarters.
The world’s leading maker of smartphones running on both Android and Windows Mobile platforms reported record-high revenues and shipments in the second quarter and said another high is to come for the current quarter.
“Our performance means that the world’s smartphone market broke through the growth inhibition and is rapidly taking a share from [traditional] feature phones,” spokesman and chief financial officer Cheng Hui-ming (鄭慧明) said.
“We didn’t have clear-cut brand positioning in the past and ‘brand’ and ‘scale’ are our focuses this year,” he said.
The company has discreetly drawn up strategies to seize a share of the global smartphone pie and solid results have been achieved within a short time span, he said.
Late last year, HTC embarked on its “Quietly Brilliant” brand positioning campaign by unveiling a slew of advertisements across the globe.
The company said its history of being a behind-the-scenes original design manufacturer for other phone brands had taught it to be a humble firm and its venture into own-brand smartphones was the result of know-how drawn from its experience, and so “Quietly Brilliant” perfectly summed up its spirit.
In HTC commercials, audiences do not see any celebrities touting its phones; instead, the “spokesperson” is the smartphone models themselves.
“Our phones have features that ‘surprise’ users and they speak for themselves in the ads for campaign consistency,” Cheng said.
Thanks to the campaigns, HTC said its global brand awareness quadrupled from last year to the current 40 percent.
After the boost in awareness, how to make HTC the top-three preferred brand for consumers when they are making purchasing decisions is the next step.
“We will keep investing as consumers’ ‘mind share’ is key to our future growth,” Cheng said.
After securing the European and US markets, HTC is gearing up for greater momentum in Asia, which only accounted for 20.8 percent of HTC’s total sales last year.
It announced its foray into the Chinese market on Tuesday last week by introducing own-brand models and partnerships with two Chinese giants — China Mobile Ltd (中國移動), China’s largest mobile operator and Gome Electrical Appliances Holding Ltd (國美電器), China’s largest electronics retailer.
It unveiled four models at a press conference in Beijing that included the HTC Tianxi (HTC天璽), HTC Tianyi (HTC天怡), HTC Desire (HTC渴望) and HTC Wildfire (HTC野火) — its first slew of models that bear the “HTC” logo in the fast-growing market.
“Sales contributions from China won’t be much this year, but it is a key market for long-term growth,” Cheng said.
At the investor conference, HTC said handset shipments expanded 80 percent year-on-year to 5.4 million units in the second quarter and said its third-quarter shipments would rise 130 percent to 6.5 million units.
Combined with 3.3 million in the first three months, total shipments for the first three quarters were 15.2 million. HTC shipped 11.7 million smartphones last year.
Second-quarter revenues were equally impressive as it was a record-high NT$61 billion (US$1.9 billion).
Both shipment and sales volume had put HTC on par with international handset rivals.
US rival Motorola Inc reported the same week that its sales of mobile devices amounted to US$1.7 billion in the second quarter. Motorola shipped 2.7 million smartphones in that time and said whole-year shipments would hit between 12 million to 14 million.
Fueled by HTC’s announcement of solid finances, a number of brokerage houses including Macquarie, Namura, Morgan Stanley, Citibank and Goldman Sachs raised HTC’s target share prices the following day to between NT$650 and NT$800.
This compared with HTC’s closing price of NT$588 on Friday. The shares had enjoyed an upside of 60.4 percent since early this year.
To ensure it has ample component supplies to meet the shipment goal, HTC said on Monday last week it would start using Super LCD (SLCD) displays from Sony Corp on its latest batch of mobile phones.
HTC has had a hard time getting enough Active Matrix Organic Light Emitting Diode (AMOLED) displays supplied by Samsung Electronics Inc, which is also a respected contender in the smartphone space.
HTC decided to take matters into its own hands by adding SLCD to its products rather than wait on Samsung.
“HTC is experiencing high-demand for many of our phones, specifically our phones with 3.7-inch displays. The new SLCD display technology enables us to ramp up our production capabilities quickly to meet the high demand,” chief executive Peter Chou (周永明) said.
Amid the cheerful buzz surrounding HTC, Goldman Sachs analyst Robert Chen (陳柏宇), however, raised words of caution.
“HTC failed to perform well last year mostly due to its smartphones that ran on Android competing against those running on Windows Mobile,” Chen said, likening the situation as a “brotherly fight” that HTC should pay attention to in its future growth.
HTC has launched a number of Android smartphones this year and is set to launch its first model on the latest Windows 7 platform by year’s end, but it remained mum when asked by analysts if it was going to launch an iPad-killer product.
“We can’t comment on questions that may divulge on products involved in our pipeline. This isn’t the right time for us yet to supply details,” Cheng said.
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