HTC Hopes to Offset Losses with Strong Presence in China

on Dec 4, 2012
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According to research company IC Insights, Taiwanese phone maker HTC (TPE:2498) sold about 32 percent less mobile handsets in 2012 compared to a year earlier and is expected to continue struggling in the smartphone marketplace in 2013. The company shipped about 30.8 million handsets, slightly less than Canadian Blackberry maker Research in Motion and Japanese Sony.

**Relegated to Third Place**
According to Mobile Magazine, HTC has been relegated to third place in the UK mobile phone market after being overtaken by Sony during the third quarter of this year. ‘Latest figures show the Xperia manufacturer overtook HTC during the summer, selling 500,000 Android units in the UK to HTC’s 440,000, although both lost market share to Samsung, with its Android sales standing at 3.2 million,’ reports the magazine.

The gap between Sony and HTC isn’t very large – the Japanese company managed to sell about 60,000 more but it’s still a cause for concern for the Taiwanese phone-maker, which once held the number one spot as the most sold Android manufacturer in the UK. ‘All sources are confirming the same trend – that we are jumping into second place in the UK Android segment.’ said Pierre Perron, UK managing director of Sony Mobile, in an interview with Mobile.com.

**Turning to China**
!m[The Taiwanese Company Believes in Localizing Its Smartphones and Tailoring them to the Chinese Reality](/uploads/story/960/thumbs/pic1_inline.png)In a bid to offset plummeting sales in both Europe and the US, Ray Yam, chief of HTC China, told the Financial Times that for him the People’s Republic is the best chance for the company to grow as a major player in the smartphone market.

While smartphones are becoming universal devices meant to be useful everywhere around the world, in China companies are being pressured by the market into finding new ways to tailor their software, hardware and retail strategy to fit the Chinese reality. As global websites such as Facebook, Google and Twitter are blocked on the mainland, the Chinese have developed alternatives including Baidu (search-engine), Renren (social network) and Tencent (microblogs). Even China Mobile, the country’s largest mobile carrier, uses a 3G network incompatible with many types of smartphones, including all but the latest iPhone. According to the FT, these differences lead foreign smartphone makers to spend “a lot of engineering resources” in order to make their phones technologically compatible and have appeal to the market. Duncan Clark, chairman of BDA, a technology consultancy in Beijing, calls the Chinese internet world a “parallel universe”.

HTC now intends to fight its way to the pinnacle of the Chinese smartphone market. The company plans to open an additional 1,000 stores in 2013 adding to the already existing 2,600 outlets. A batch of new devices is set for release in Beijing this week including smartphones running on Windows 8 and an Android model called J Butterfly that features an impressive 5-inch high-definition display.
The Taiwanese company has already negotiated deals with all three main Chinese carriers, which will launch the new range of HTC smartphones simultaneously this week. HTC has also partnered with a local bank, which allowed it to turn some of its handsets into mobile wallets equipped with near-field communications chips enabling them to be tapped against a reader to make a payment.
Despite facing strong competition from companies such as market leader Samsung and Lenovo, HTC is confident its new series of smartphones specifically tailored to the lifestyle and online habits of the Chinese will be very successful.

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