But phones appeal to upwardly mobile Chinese, literally
Updated figures from Taiwanese smartphone maker HTC confirm the company is still in a nosedive with 2012′s Q2 sales falling more than a quarter, with projections for Q3 indicating they could plunge even further to T$70 billion – about half of what it earned this time a year ago. In line with the fall in sales HTC’s share price has similarly plummeted, down more than two thirds in the past 12 months. Such is the alarm that the Taiwanese government, whose own exports are largely dependent on HTC’s fortunes, recently hinted it may need to prop up the struggling phone manufacturer with financial help. It parallels the concern about RIM in Canada where the Government is similarly monitoring the Ontario phone maker’s plight, though there has been no suggestion so far that it will be given a State hand.
Both companies are fighting at the top end against the duopoly of Apple and Samsung, with both HTC and RIM due to launch new handsets soon in what could be crucial to their survival.
But Apple and Samsung are equally launching new handsets to time with the lucrative pre-Xmas markets, a squeeze that leaves little room at the top.
At the bottom end there is little room either, with that dominated by Chinese manufacture Huawei.
Making matters worse is HTC’s lack of marketing muscle. Apple and Samsung spend up to six times more on marketing smartphones compared to HTC.
Apple spent $535 million last year marketing its iPhone and iPad alone – more than twice HTC’s net income for its second quarter.
Oddly enough, China is one of the few sweet spots for HTC where its mid-range Desire line is popular with the nation’s growing middle classes.
There its market share has doubled since the beginning of the year and now stands at 6 per cent, according to analysts Nomura.
Overall, China last quarter accounted for 27 per cent of HTC’s new smartphone shipments, compared to the USA which accounted for only 16 per cent.