HTC: 'No plans' for low-end smartphone market push

HTC: 'No plans' for low-end smartphone market push

Summary: When all else fails, hit the burgeoning emerging markets with low-end smartphones to bump the figures. Except, struggling smartphone maker HTC thinks that would be beneath it.

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TOPICS: HTC
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In the pot of struggling smartphone makers, it seems like a logical move to push towards the emerging market.

The rapidly-expanding population centers make Brazil, Russia, India and China --- BRIC countries --- an attractive point of interest for smartphone makers when they fall on hard times. Research in Motion made a push with low-end smartphones, and Nokia always has. There's a trend emerging.

As the third musketeer in the dwindling smartphone sales race, HTC is taking a different move by signalling a full-throttle-ahead approach in its existing high-end smartphone markets.

The Taiwan-based smartphone maker said it wants to focus on shipment growth and its profit margins. Chief executive Peter Chou said he doesn't "want to destroy our brand image."

The logic here is that low-end smartphones would spoil HTC's image as a leader in strong, powerful and competitive devices. In taking a leaf out of RIM's playbook --- no pun intended --- pushing a low-end range of phones, despite standing as a well-known profit bumper, would signal the company's weakness and tarnish its reputation.

Chou said shipments to China will be roughly three-times those of 2011, with the company seeing a modest growth in shipments to emerging markets, including India among others.

HTC hopes to turn things around in Europe as one of the smartphone powerhouses of the world.

The smartphone maker cut its second-quarter revenue target by 13 percent after U.S. and European sales failed to meet expectations. U.S. sales suffered after Apple's successful bid to see HTC phones held up at the border after a patent infringement claim.

He also hinted at the possibility of looming acquisitions of small software and marketing companies --- despite claiming there are no deals currently on the table --- in a bid to recoup its position in the European markets.

HTC also suffered a hit after Microsoft reportedly pushed the company out of the 'Windows RT loop'. Reports suggested the smartphone maker was "inexperienced" in tablet building, and some accused Microsoft of playing politics.

Image credit: Stephen Shankland/CNET.

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8 comments
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  • That makes some sense to protect the HTC brand . . .

    . . . but I would have expected HTC to create a different marketing name/brand to serve the cheaper markets; the same as Toyota for the poor and Lexus for the rich.
    Wakemewhentrollsgone
  • Let's put five thousand on Gluefoot

    Investing assets in a business where they will earn razor-thin margins is an activity best suited to those who have lots of assets, and who have already put down big bets on all the better horses. HTC is wise to stay focused on things they do well.
    Robert Hahn
  • Why not?

    I mean, after all you can release models from 2 years ago and put WP7 on them... That's Nokia's strategy so far. :-)
    slickjim
    • and yet

      They still outperform both Android and iPhone.
      hopp64
    • Didn't know the Lumia 900 was two years old.

      but then, isn't the iPhone4 two years old?
      William Farrel
  • They already make one ...

    The Explorer is the most low end smartphone available from HTC. Its budget design is great for my mum so it must be poor.
    smithy93sam
  • I don't understand....

    They have numerous low end devices in the market already. Seems like an attempt to boost brand image by claiming that.

    http://www.tech-thoughts.net/
    sameer_singh17
  • An Easy Solution

    Just create a subsidiary and sell the cheaper phones under a new brand. Bam! You can enter the cheaper market without diluting your name. Premium companies do it all the time, and the consumer does not notice. Do you think less of Audi if you know they are owned by Volkswagen? Please email me a link with 1 billion US for the tip. Thanks.
    transcenden