HTC just unveiled its new flagship smartphone, the One M8, but it faces an uphill battle in marketing against industry behemoths Apple (NASDAQ:AAPL) and Samsung Electronics. To gain momentum and set the One M8 apart, HTC is putting the device on sale immediately and launching a new, aggressive marketing strategy, according to a senior HTC executive.
In an interview with FierceWireless, Jason Mackenzie, HTC's president of the Americas, said the company learned a lot last year from selling and marketing the HTC One M7, its 2013 flagship phone. The device was widely praised, sales of the One M7 fell below expectations. "We sold more HTC Ones than any other product that we've ever launched," he said. "We also agree that that product deserved to sell more and be more successful."
Mackenzie said HTC improved its supply chain to be able to mass-produce more all-metal One M8 units more efficiently. The biggest difference though is that One M8 is going on sale immediately at numerous carriers across the United States, rather than weeks after the announcement.
In the U.S., the One M8 is available online right now through carriers and retailers including Amazon, Appalachian Wireless, AT&T Mobility (NYSE:T), Best Buy, Bluegrass Cellular, Car Toys, Cellcom, Chat Mobility, Cincinnati Bell Wireless, Costco, Military Exchange, Net10 Wireless, Pioneer Cellular, RadioShack, Sprint (NYSE:S), Verizon Wireless (NYSE:VZ) and Walmart. It will also be available online and in retail stores through T-Mobile US (NYSE:TMUS), and broadly available in stores across the majority of HTC's partners starting April 10.
"By the end of next month we'll have a significant presence in their retail stores, with very consistent messaging from a Verizon store all the way to a T-Mobile store in terms of how they're talking about this phone," Mackenzie said.
Last year, HTC unveiled the One M7 before Mobile World Congress but it took nearly two months for the phone to go on sale in the U.S., mainly because of supply chain issues. This year HTC's approach is "significantly different," Mackenzie said. It's a good thing, too. Samsung's Galaxy S5 goes on sales in stores April 11 and is widely available for pre-order now.
Mackenzie acknowledged that HTC does not have the billion-dollar marketing budgets Samsung and Apple have, but said the company is taking a new approach to advertising with the One M8.
"What we see our competitors talking about are just features, features, features," he said. "There's so much money being spent in this category that it all becomes white noise to our customers. You'll see our ads have this attitude of, we're not for everyone. HTC is not for everyone. We're for those who demand more, who desire the best and who are willing to look below the surface. We're going to put our customers on a pedestal and invite them to go ask the Internet. Basically, don't take our word for it, go ask the Internet, and they'll see these wonderful, fabulous reviews."
To that end, in Times Square in New York City, HTC will be rolling out a "huge presence," Mackenzie said, one that explicitly takes on Samsung and its' tagline of "the next big thing" for its Galaxy line of products. One billboard will say: "We don't need to call it the next big thing. The Internet will."
Another will have a word jumble of a bunch of "blahs" put together. HTC will then say, "It doesn't matter what we think. Ask the Internet." Mackenzie said that will be "the attitudinal portion of it." Some customers will check the Internet and see reviews of the M8 he said, and others won't, but they will be "won over by the sheer confidence of a brand who's speaking like that."
According to the Wall Street Journal, HTC's new U.S. advertising campaign uses actor Gary Oldman telling viewers to "ask the Internet" about the One M8.
"I could tell you how amazing the all-new HTC One is, but I won't," Oldman says in the ad. "Well let's face it, you either already know, or you want to see what others have to say about it."
Mackenzie told the Journal that actor Robert Downey Jr. will still remain HTC's corporate spokesman until the end of 2015. Last year he starred in an ad campaign that featured him coming up with odd and unusual mnemonic devices for remembering HTC's name, such as "humongous tinfoil catamaran," but didn't really focus on HTC's products.
Such a strategy is risky, but may be necessary for HTC, which certainly does not have the marketing budget of its larger smartphone competitors and posted its first ever operating loss in the third quarter of 2013. Mackenzie told FierceWireless the smartphone market is "very competitive," which may be something of an understatement.
"We're making a conscious decision that we're going to be different than some of our competitors," he said. "We're not going to put out products with small, incremental, evolutionary type of benefit for our customers, and then try and mask that that with huge, expensive ad campaigns. We're going to choose to invest in our customer and do that by putting our investment in delivering the absolute, most innovative product with the best , most crafted innovative design."
On top of that, he said, HTC is going to take care of customers with things like "HTC Advantage," which the company announced in February. As part of that program, HTC will give U.S. customers who purchase a new phone from its HTC One family of smartphones a free one-time screen replacement for cracked screens within the first six months of owning the device. Further, HTC also said it will continue to support the HTC One family of smartphones in the United States with major Android software upgrades for up to two years from the initial launch date of the phone.
"We think ultimately those other guys, if you're basing your business on almost purely advertising, you're building your house on sand," Mackenzie said. "We're choosing to build it on concrete, and it's going to take some time, so we're thinking long term and not just on a short-term basis."
That echoes what other HTC executives are saying. Drew Bamford, head of user experience at HTC, told The Verge that the company is "not that interested in selling the most phones. We're interested in selling the best phones. And I think you can be profitable with both of those strategies."
- see this The Verge article
- see this WSJ article (sub. req.)
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