HTC to enter cost effective phone segment to take on Samsung, Nokia

Smartphone vendor HTC is planning to enter cheap phones segment to expand its range and improve profit.

The presence in the cost effective phone segment has propelled Samsung, Huawei, etc. to continue to be in the top 5 vendor list in Q4 2013.

HTC has been positioning itself as a premium smartphone vendor, but the Taiwanese device maker could not take on Samsung, Apple, etc.

In India, HTC is far behind local phone marketing companies such as Micromax, Karbonn, etc. The Korean device vendor Samsung is the smartphone leader in India, which has around 900 million mobile subscribers.

Industry analysts say HTC is finally learning from its past mistakes. HTC could not sell HTC One and other product despite spending huge funds. Also, HTC smartphones are not widely available.

Also read: Indians prefer sub-$150 smartphones, says IDC

Market research agency IDC last week said large screen and low cost smartphones are driving growth in devices. Indians prefer sub-$150 smartphones. “Among the top trends driving smartphone growth are large screen devices and low cost,” said Ryan Reith, Program Director with IDC’s Worldwide Quarterly Mobile Phone Tracker.

HTC to enter budget phone segment

IDC said cheap devices are not the attractive segment that normally grabs headlines, but IDC data shows this is the portion of the market that is driving volume. Mobile markets like China and India are moving toward a point where sub-$150 smartphones are the majority of shipments, bringing a solid computing experience to the hands of many.

China, which received the attention of Apple, is an important market for HTC.

HTC does not reveal how many phones will be unveiled this quarter.

Also, it does not share specific details on the pricing of the cheap smartphone.

Meanwhile, HTC forecast that its first-quarter loss per share will be NT$2.10 to NT$2.60.

Its sales will be between NT$34 billion ($1.1 billion) to NT$36 billion, Bloomberg reports. The first-quarter sales forecast means Taoyuan, Taiwan-based HTC expects to post its lowest quarterly sales since 2009.

HTC, which last year signed Hollywood actor Robert Downey Jr. to promote its brand, plans to boost marketing to halt a slide in sales that spurred its first annual net loss on record. The latest version of its slim, metallic HTC One will be released next month with a larger screen and improved camera, said media reports earlier.

Gross profit margin of HTC will be 21.5 percent to 22 percent this quarter against 17.8 percent in the fourth quarter of 2013.

Anand B


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