HTC insists on premium brand in SA

The HTC One (M8) is available in South Africa and is marketed as a premium smartphone. (Duncan Alfreds, Fin24)
The HTC One (M8) is available in South Africa and is marketed as a premium smartphone. (Duncan Alfreds, Fin24)
Cape Town - HTC plans to build market share as a premium brand rather than building no-name devices for operators.

"The global president of HTC has mandated that HTC will be a quality product. In other words, what will drive a consumer to buy an HTC, will be the premium quality that they can expect," Douglas Jewson, country manager for HTC told Fin24.

The manufacturer will use the One flagship device as a headliner for its brand in SA.

"In time, what you’ll see moving forward is that there will be four categories to HTC," Jewson added.

The One (M8) flagship was recently launched in SA, and the company will follow this up with the Mini device, lower cost Desire, and possibly a phablet.

Plastic

HTC also makes a dual SIM version of the One, but it is unlikely to come to SA. Jewson said that the range of HTC devices will have a unique identity as the brand seeks to establish itself in the country.

"What you'll find in those ranges, although the platform and the operating system will be the same… the build components, not the quality will be different."

The company launched the One (E8) in June this year and, unlike the premium version, it has a plastic body in an effort to lower production costs.

"As you go down from your flagship One range, to maybe the Desire or phablet range, they might build the device out of plastics."

"Instead of building a device out of pure aluminium with Gorilla Glass, build it with hard, durable plastic with standard glass. Then, suddenly what happens is you reduce the cost of that device by $200 to $300; it suddenly becomes a massively affordable prepaid offer," Jewson said.


Devices like the HTC One Mini are priced lower than premium devices to build market share. (Duncan Alfreds, Fin24)

Cheaper devices should help the company gain market share, but it faces a number of competitors who have targeted devices at price points from premium to budget prepaid.

Samsung, for instance, sells the Galaxy Pocket smartphone for under R900 and though it only has a 2 megapixel camera and a 7cm or 2.8 inch display, it is targeted at people who have feature phones.

Downside

However, HTC will not white label its products.

"If you start down-specking some of your products in terms of a white label brand, you might take away some of the quality experience that customers expect when they buy the device," Jewson insisted.

Some companies have built sales volumes, particularly in developing countries, by selling no-name handsets. Huawei supplied Vodafone through the 858 sold through Vodacom in SA and the Steppa available from MTN.

However, the company has recently been on a mission to promote its own brand with the launch of the Ascend P6 and its follow-up, the P7.

Jewson warned that there was a downside for companies which produced unbranded devices.

"You might sell more devices, but you might also damage your brand."

He conceded that big players might have the capacity to sell white label handsets, but insisted that HTC would do things differently.

"Some of the brands that have been able to [white label] might have the capacity, might be well established; they might be on the next evolution of their handset strategy, but HTC has taken a very different approach."

He said that HTC was intent on developing in the South African market where brand awareness was low.

"I think we need to establish that market share, get that penetration, get that retention; get that consistency first before we look at the next step in our evolution."


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