HTC to avoid low-end smartphone market

HTC will remain focused on the mid-to-high end of the smartphone market despite its recent struggles, according to CEO Peter Chou.

HTC CEO Peter Chou


"We don't want to destroy our brand image," Chou said in an interview with the Wall Street Journal. "We insist on using better materials to make better products that offer premium experience. Many consumers like that."

HTC has vowed to focus on emerging markets, such as China and India, to bolster its sales. Chou said that HTC sells phones for around $314 in China, and he said the company will not match rivals in China by selling phones at half that price. "We won't have good products at that price level," he said. 

Apple, Samsung and others have garnered increasingly large shares of the smartphone market in China during the past few years. HTC is trying to steal away some of that share to combat slowing growth in the U.S. market.

The comments come amid troubles, both financial and legal, for HTC. Last week HTC lowered its second-quarter revenue forecast by 13.3 percent, citing weaker sales in Europe and delays in getting some of its products through U.S. customs. Specifically, shipments of two of HTC's flagship smartphones, the Evo 4G LTE for Sprint Nextel (NYSE:S) and One X for AT&T Mobility (NYSE:T), were held up last month at U.S. customs to ensure they complied with a ruling from the U.S. International Trade Commission. HTC said late in May that its shipments were proceeding as normal, but the delay clearly cut into sales for the company.

HTC has also suffered several setbacks due to its patent battles with Apple (NASDAQ:AAPL). However, Chou said the patent fights are not long-term problems for HTC.

"Patent lawsuits haven't caused any actual damage to HTC," Chou told Reuters in a separate interview. "Only the Street is worried for us, we're not worried ourselves. We hope the disputes will get more reasonable in the future."

HTC is banking on a simplified product portfolio via its flagship One series of devices to help revitalize sales. The company has focused on the camera and audio experience of its new phones, in addition to its revamped Sense user interface. 

In other HTC news, the company completed its $300 million purchase of graphics chipset maker S3 Graphics, gaining 200 patents in the process. 

For more:
- see this WSJ article (sub. req.)
- see this Reuters article

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