HTC's Mackenzie: We can be a strong No. 3 in smartphones

BARCELONA, Spain--HTC can break out of its sales slump and rank behind Samsung Electronics and Apple (NASDAQ:AAPL) as No. 3 in terms of smartphone sales if it executes on an aggressive new marketing strategy for its flagship HTC One smartphone, according to a senior HTC executive.

In an interview with FierceWireless here at the Mobile World Congress trade show, Jason Mackenzie,  HTC's president of global sales strategy, said HTC is well positioned with the One Android phone, which it introduced last week, to make a strong push to be No. 3 behind the two dominant OEMs.

"If we do a good job in getting our message out and executing on our plan in terms of driving consumer demand, we believe HTC has the best opportunity of any OEM to be a strong No. 3," he said, adding that HTC can not only become the No. 3 player but can "actually grow from that position." He noted that the One will be available globally through more than 185 operators and major retailers in more than 80 regions and countries beginning in March.

HTC was once synonymous with Android, having delivered the first Android phones to the market and captured major attention and sales with the Evo and Droid Incredible lines in the United States. However, over the past year, HTC has been challenged at the high end from the likes of Samsung and Apple as well as from companies like Huawei and ZTE at the lower end of the market. According to research firm IDC, HTC captured 4.6 percent of the global smartphone market for the full-year 2012, down from 8.8 percent in 2011.

HTC reported a 91 percent drop in net income in the fourth quarter and forecast continued declines in revenue. According to IDC, HTC was not in the top 5 smartphone rankings in the fourth quarter and was No. 4 for the year, behind Samsung, Apple and Nokia (NYSE:NOK).

Mackenzie said looking back, he realizes now that in the fourth quarter of 2011 the smartphone market started to change and the OEM brand became more important than anything else. He said HTC always prided itself on its slogan, "quietly brilliant," and wasn't flashy or aggressive in promoting its own brand by itself, preferring to work with partners to develop customized products, like the Evo for Sprint Nextel (NYSE:S). That spread HTC's marketing message "too thin," he said. "We want HTC to be synonymous with the best smartphones in the world."

Last year HTC focused on its camera and audio capabilities for the One series of phones, but that did little to boost sales. Mackenzie concedes that the marketing message was "too vague" last year. "We will be more aggressive in communication," he said. "We need to take ownership of our innovation."

HTC will be highlighting in its marketing three main innovations in the One, which it has trademarked. The first is BlinkFeed, which turns the device's home screen into a single live stream of personally relevant information that includes social updates, entertainment and lifestyle updates, news and photos. The intuitive and innovative service can be easily customized. He said HTC will also focus on its BoomSound speaker and audio technology, which includes Beats audio and putting dual-stereo speakers on the front of the device with amplifiers. HTC will also focus heavily on its camera, which uses "UltraPixels" to let 300 percent more light into photos, and what it calls "Zoes," which turn a series of photos and videos into mini-movies that can be remixed and shared with friends.

HTC tried to do that last year and ran into the buzz saw of Samsung, which started marketing its Galaxy S III last spring. Samsung wound up selling 40 million Galaxy S III units by January, more than the 32.1 million units Gartner said HTC sold for all of 2012. Samsung has confirmed it will announce its next flagship, the Galaxy S IV, on March 14. Mackenzie said this year will be different.

"We need to not stop marketing when they launch," he said. "We'll continue and really invest. We're going to invest more than we ever have in terms of marketing." He declined to give a specific figure. Mackenzie said HTC will have a national marketing footprint but will also be very aggressive in certain markets, including Chicago, Dallas, Miami, New York, San Francisco and Seattle, where it can reach its target customers. HTC will use that approach in other countries as well. Mackenzie noted that HTC had a strong year in 2011 (Gartner reported it sold 43.2 million phones that year) and that many of those customers are coming  up on two-year contracts, so HTC will try to get them to upgrade to the One.

"We're embracing that we need to be a challenger," Mackenzie said. "We're a challenger." referring to Samsung and Apple, he said, "We're fighting against two of the biggest companies in the world."

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