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 … expand full story