HTC has warned of a projected decline in sales of up to 29% in the current quarter after deciding to focus on mid-tier and high-end smartphones rather than going for volume sales at the lower end. Defending the strategy in an interview in the WSJ, the company’s CFO Chang Chia-lin said that brand image is, in the longer term, more important than sales volumes.
We think that’s the right strategy because we started as a high-end player, and there is still room to go in terms of being a sizable market-share player. The flagship product would create a halo effect, drawing mid-tier and entry-level models along with it. Hopefully, the pie will grow and the mix will be healthy. It’s natural that revenue contribution is associated with brand perception, and that’s something we care about.
Chang argued that while low-cost brands may pick up the volume sales from the bottom end of the market, they risk not being seen as a cool tech brand by more upmarket customers …
Despite growing sales in the previous two quarters, HTC has been struggling for some years in the smartphone market, losing its top-1o ranking in 2013 and seeing its double-digit market share fall to less than 2%.
Pinning the company’s hopes on high-end devices looks somewhat shakey after decidedly mixed reviews for the flagship HTC One M9 – including our own. The company launched a cheaper version of the M8, the M8s, earlier this month.
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