HTC: Low-end smartphones would spoil our brand

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

HTC Chief Executive Peter Chou holds the new HTC One X Android phone at Mobile World Congress in Barcelona, Spain.
HTC Chief Executive Peter Chou holds the new HTC One X Android phone at Mobile World Congress in Barcelona, Spain. Stephen Shankland/CNET

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.

This story originally appeared at ZDNet's Between the Lines under the headline "HTC: 'No plans' for low-end smartphone market push."

 

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