HTC's Wang pins problems on marketing, not products

HTC Chairwoman Cher Wang said the next two months are the company's "biggest challenge" as it moves into the holiday shopping season and tries to reverse its sales slump amid tougher competition from Apple's (NASDAQ:AAPL) iPhone 5s and 5c, Samsung Electronics' Galaxy Note 3 and other holiday offerings.

"We really have the best technology and the best product," Wang said in a weekend interview with Bloomberg TV while attending the Asia-Pacific Economic Cooperation conference in Bali, Indonesia. HTC needs to "communicate better" with consumers, she said.

Last week HTC reported its first quarterly loss since it became a public company in 2002. The Taiwanese smartphone maker reported a net loss of around $101 million for the third quarter, and an operating loss of $119 million. The company said revenue clocked in at just $1.6 billion (which, coincidentally, is around what struggling BlackBerry (NASDAQ:BBRY) reported in revenue for its most recent fiscal quarter). That's down from $2.39 billion in the year-ago period.

HTC has been banking on its One smartphone, and the recently released One mini variant, to help turn sales around. So far, those efforts have proved largely unsuccessful despite widespread praise from analysts and reviewers for the products.

The company recently hired actor Robert Downey Jr., star of the "Iron Man" and "Sherlock Holmes" film series, to be the spokesperson for a new advertising campaign aimed at restoring luster to the company's brand. And the company is keeping its powder dry for a larger marketing blitz for the 2013 holiday shopping season.

"Our communication does have a problem but we are improving on that," Wang said. "It's a gap between our new products coming out and we are improving our innovation and our marketing," she said.

Of the hiring of Downey, Wang said: "People like him because people see him as a change maker. I believe HTC is here to change." So far, the marketing has focused on what HTC's brand means and less about the company's products or technology differentiation. That will come later in the campaign, HTC has said. Some of HTC's non-Downey marketing has focused on specific features found in the One, such as its BlinkFeed news and social reader and BoomSound audio.

Some analysts have called for HTC to partner with another company, but Wang has resisted calls for a sale. Wang's stake in HTC would help block the company from a hostile takeover, Jean-Louis Lafayeedney, an analyst at JI Asia in Hong Kong, wrote in August, according to Bloomberg. The chairwoman and her husband Chen Wen-Chi own more than 18 percent of HTC directly or through wholly owned investment firms, according to data compiled by Bloomberg.

"This ubiquitous intelligent technology is still at infancy stage, why do you want to consolidate?" Wang said when asked about mergers in the handset industry, adding that HTC should achieve a 20 percent share of high-end smartphone market in China next year.

For more:
- see this Bloomberg article

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