HTC will not produce low-end phones and destroy its brand image says Peter Chou

In an interview with the WSJ, HTC CEO Peter Chou repeated his desire to protect his company's brand image by not producing super low-end handsets just to increase shipment numbers. While HTC has recently released high-end models like the HTC One X and the HTC EVO 4G LTE, it also has produced models like the HTC One V. The latter might be considered low end in the U.S., but not in some other locations around the globe. For example, in China HTC phones start at 2,000 ($313 USD) yuan while a competitor like Motorola might sell a phone for 1,000 yuan. Chou says that at that price, you won't find good products.According to Gartner, HTC's market share was only 3% in China last year while Apple had 9.9% of that market and Samsung 18.6%. Nomura Securities Aaron Jeng said that last year was a tough one for HTC in China and that 2013 could be tougher. Chou said that HTC's shipments to China will triple this year.

In the U.S., HTC was at one time the most popular non-Apple name in handsets before losing that title to Samsung. And while Chou says he wants to improve HTC's numbers in Europe, the Middle East and Africa, he also would like to make up the sales in China lost to Apple and Samsung. HTC is also losing share to upstart Chinese manufacturers like Huawei and ZTE that offer feature rich models at low prices. RBS analyst Wanli Wang says that there is enough room in China to support many different segments. Wang says that HTC needs to identify the segment it wants to be in and then execute the strategy.

China is an important region for HTC and many Chinese are now switching to low-end smartphones according to Nomura's Jeng. Jeng says that with all of the features now found in cheaper phones in the country, many Chinese smartphone buyers say that the cheap models are good enough for them to use.

source: WallStreetJournal