HTC has reaffirmed its commitment not to produce “cheap” smartphones for emerging markets like China, India and various countries in Africa. Currently, HTC has a few handsets which sell for 2,000 yuan ($314) in China, but HTC has no plans on delivering handsets which cost 1,000 yuan or less to compete with the likes of Samsung and Motorola.
“We don’t want to destroy our brand image,” Mr. Chou said. “We insist on using better materials to make better products that offer premium experience. Many consumers like that.”
HTC’s 2011 market share in China reached 3% last year, far behind Apple’s 9.9% and Samsung’s 18.6% market share numbers. But HTC is taking a new approach in emerging markets by launching mid-range devices which are more suited to the region and are priced much lower than the flagship HTC devices released in the U.S and European markets.
While Motorola and Samsung may have quite a few cheap smartphones available in these markets, HTC’s CEO claims “We won’t have good products at that price level,” and insists that consumers want mid-range products which deliver a better experience. With its current approach, HTC plans on increasing sales in China by 300% this year, making it one of HTC’s mode important global markets.
HTC has always been on the cutting edge of smartphone technology and has created a strong brand around their devices. Producing cheap smartphones would be a step in the wrong direction and could dramatically decrease its profits even if it manages to gain substantial market share.
Do you think it’s strategy for emerging markets is right or should they compromise on quality in order to steal market share from the likes of Samsung and Apple?
Source: WSJ
