1. HTC
Marketign strategy analysis
Introduction
HTC is an international corporation specializing in the manufacturing of mobile phones,
smartphones and tablets. The company was founded in 1997 in Taipei, Thailand and is still
headquartered there (HTC,2016).HTC is notorious for the fact that they were the first company
to design and manufacture touch screen mobile devices with the ability to access wireless
internet (Holson, 2008). The company has also been credited with the creation of the first mobile
devices operating on Android and later some operating on Microsoft. In October 2009 the
company launched its first global advertising campaign. Although the company has lost some of
its positions on the market at 2012 due to high competition with Samsung and
Apple(Culpan,2012). Anyway, the company has been recovering since and by april 2014 the
company reported the highest growth it has had since 2011.All in all nowadays the company is in
problematic situation since they have been losing market share in the west due to their inability
to differentiate between its products, the company reported 100 million in losses for the last
quarter and is currently fighting to keep its small presence on the North American
market.(Statista, 2016)
Industry analysis
By 2014 almost 2 billion people owned a mobile phone, this number is expected to reach 2.6
by the beginning of 2017 as demand for mobile devices keeps growing.(Statista, 2016) For 2015
the total sales of mobile phones is estimated to be 400 billion US dollars. With 100 billion
dollars of sales coming from China alone. (IDC, 2016). The market is expected to keep growing
especially in China as the rising middle class there is expected to be able to put away more
money for mobile devices. Currently there are several companies competing in the smartphone
industry. The leaders being Samsung and Apple. By the second quarter of 2015 Samsung has
established itself as the ultimate leader by having 21% market share and Apele following it with
little less than 14% of the market. Other big players are also Huawai. Xiomi and Lenovo , with 8,
5 and 4 % respectively.(Statista, 2016) For the last couple of years HTC’s market share has
shrunk from 11% in 2011 to less than 2% by the end of 2015. (Statista, 2016) Generally the
smartphone market can be characterised as an oligopolistic market, with several major players
holding the majority of the market share. (Statista, 2016) It is a well known fact that there are
significant barriers to entry this business. Starting up a smartphone manufacturing business
requires significant initial investment, since the process of producing smartphones is associated
with expensive facilities, technological expertise as well as red tape since often the
manufacturing business is associated with environmental pollution. Another issue to be
considered is that among the smartphones market there is a very strong sense of brand loyalty.
To illustrate this we can see the research on Apple’s brand loyalty by Pinson and Brosdahl

2. (2012) According to their findings 45% of the interviewed strongly agreed they will continue
buying Apple’s products despite competitors deals and 48% shares moderate agreement to that
statement. And 50% strongly agreed that they will recommend Apple products to friends and
family. According to the World Bank statistics in the Western World the mobile phone industry
has reached its maturity stage.(WorldBank, 2016) In countries such as the UK and USA sales
have been flattening or having negligible marginal growth since 2010-2011 while in developing
countries such as China and India. According to Gartner(2016), in 2015 the sales of mobile
devices in developing countries in total have risen with 18% since 2014, while in developed
countries the sales increase was little over 8%.
Therefore, the next conclusions about the future of the mobile industry can drawn. Firstly, the
sales of mobile phones would probably continue rising in developing countries in the years to
come. So, there are still profits to be made in that markets. Secondly, since the product there is in
its growth stage, it can be expected that there is no serious brand loyalty established in these
markets. In addition, the demand in these markets seems to be different as well, because of the
average low income of the population there, cheaper brands would be prefered. Thus there still
seems to be chances for smartphone manufacturers to enter these markets and make profits. At
the same time in the developed countries sales would continue to flatten and competition would
keep becoming more and more fierce with every year. There are already several well established
brands in that market, so it would be hard for new brands to enter and compete.
Corporate strategy
The main purpose of HTC as a company is to design smartphones, tablets and similar mobile
devices. As it states in its mission statement “Our mission is to become the leading supplier of
mobile information and communication devices by providing value-added design, world-class
manufacturing, and logistic and service capabilities
“ (Referenceforbusiness.com, 2016)The company doesn’t have any strategic business units as it
has concentrated its efforts on producing mobile devices.
Another point to be considered is that HTC is making a big effort in research and
development. Currently, a quarter of its employees are working in the field of research and
development. The company actually has developed its own version of the Android operating
system, and has established a software design office for that purpose. (MocoNews, 2009)What is
more, the company also has an office that is working on wireless technologies
development.(Whitney, 2010)
As far as the BCG matrix is concerned. HTC doesn’t mention in its reports the number of sales
by product. Anyway, currently apart from one model of tablet and one model of cameras as well
as virtual reality system,.So it is obvious that HTC relays on its smartphone sales. There it can be
said that the smartphones are the cash cows of the company, since they are responsible for most
of its revenues. HTC’s virtual reality system, the so called Vive, can be considered a question
mark. It was introduced in early 2016 and so far sales have been going very well. (Gaudiosi,
2016) HTC also has a fitness system which it launched at the beginning of this year. Again, it

3. can be classified as a question mark since it is still too early to say it the product has been
successful. As far as the tablets and cameras are concerned.(HTC, 2016) They are only
manufactured by HTC but they are branded and advertised by Google. As far as ‘stars’ and
‘pets’ are concerned. As mentioned earlier HTC only a couple product lines, so it makes it very
hard to define any of the product lines with every four of the BCG categories. What is more,
considering the fact that HTC has in fact only 3 product lines( here we exclude the model Nexus
tablet, and the cameras that in fact a complimentary product), it can be claimed that HTC has
very small product width. The product lines of sport equipment and virtual reality are not deep
since they have only one model so far, however the smartphone product line is deeper offering
two types of smartphones. Series “One” and “Desire” series. (HTC, 2016)
Marketing strategy
In its annual report for 2014, HTC outlines its plans to penetrate the market of tablets and
cameras. However, these other products are not that well established on the market. HTC still
largely remains known for its smartphones. Historically HTC, started as a white label
manufacturer for Windows. (HTC website). However, following the example of other such
companies like Huawai and ZTE it started offering products of its own which proved to be a
successful attempt as sales surged. By 2008 HTC was the biggest seller of Android
phones.(Edwards,2015). Actually up until 2009 HTC’s own branded devices were having bigger
sales in total than Samsungs’ . (Gartner, 2016).
In their paper Masterman and Wood (2006) have outlined that the best way of understanding
the market’s position of company is by identifying the company as being either: a market leader,
market challenger, market nicher or market follower. Considering that HTC, as mentioned earlier
the company was one of the first companies to manufacture touchscreen devices, the fact that the
company has so far registered more than 800 patents.( Masterman & Wood, 2006). What is
more HTC was the first company to develop a touchscreen that allows fingertip navigation
(Products and innovation, 2010). As mentioned earlier, some years ago HTC has had a much
bigger market share but it has been contracting since, despite this because of its high degree of
innovation we can hardly describe HTC as a market leader. The company had small market share
even during its best times(Statista, 2016). Therefore, it will be more correct to say that HTC is in
the role as a market challenger. As a challenger, the company hasn’t fully made a frontal attack.
Indeed, the company has been trying to improve its distribution channels(36,37) , however the
company hasn’t engaged in any forms of aggressive advertising or hasn’t cut down on its prices.
It can be said that HTC is to some extent practicing a bypass attack. The company has
developed new technologies used in the smartphone(ex. BoomSound) and have been diversifying
into unrelated products(ex. Vive, virtual reality system).
Generally HTC has been trying to satisfy needs in two major target markets. Middle-income
and high income customers offering them devices in each of the price ranges.What is more, due
to the fact that HTC is a really innovative brand their target market can be seen as the more tech-

4. savvy people. However, drawing from what we previously exposed about the market condition.
The market of the smartphone industry is slowly shifting from and oligopolistic market to one of
perfect competition. Which means that profits are being squeezed.(Edwards, 2015) The Android
manufacturers are in a price war with each other, currently LG is making a profit of a penny per
phone. The product reaching its maturity stage, means that the market is overabundant with
various models.(19) Despite this, HTC was offering more than 40 different types of models by
mid 2015.
Taking into account the oligopolistic structure of the smartphone market HTC has to rely on
differentiation. HTC tries to bring market value through “launch innovative products and friendly
user interface, and rapidly response to the market change due to deliver product diversification to
meet market's need “ (Yearly reports) For example, the vice president for planning and product
management in HTC, O’Brian said in regards to why HTC charges 200 dollars more for its
virtual reality system than its competitor Oculus: “The price point is not an apples to apples
comparison because we put more in the box”(25) . Inthe mobile phone industry, the HTC one series
are known for producing the best sound. All the One M series are notorious for their so called
“BoomSound”(26) thus they are often preferred by melomans or people who are working in the
music industry. Of course, it is not only the One series that are known for it. Almost all HTC
smartphones are considered to have a high sound quality. Another way that HTC differentiates
its products is by providing a larger amount of memory storage in its devices than other Android
manufacturers for a reasonable price. As mentioned earlier in this paper, HTC also develops the
Android operating system for its own devices, the so called HTC sense “UI”. Most of the
changes are often cosmetic, however sometimes the customized system helps preserve battery
storage.(27) HTC is also known for its metallic design. So far, for several years HTC is the only
brand that has metal in its corpus.(27) According to some people HTC’s design matches Apple’s
design.
Up until recently HTC hasn’t done much in terms of diversification. In 2016 it launched 2 new
product lines. The first one being Vive, a virtual reality system and the other one being UA
health box, a fitness system.(23) This can be viewed as an attempt from HTC’s side to conduct a
horizontal diversification by using product development. Both Vive and UA Healthbox are
products within the specialty of HTC, computing devices development. Apparently HTC is
trying to break away from its dependence on one product line.
As far, as growth strategies are concerned. Market penetration is not widely used by HTC. The
company hasn’t made any effort to increase the number of sales in the already existing markets.
And this makes sense, since increase in the volume of sales is not very likely due to the nature of
the product. A person having one smartphone wouldn’t need buying another one. Product
development, however has been occasionally used by the company. HTC has introduced new
exciting products in the already existing market. An example of this would be the innovatory
products such as HTC Rezound and LTE 4, both of them mentioned later in the paper. However,
generally the company hasn’t introduced completely new products but rather highly innovative
products aimed at the various market segments. The creation of the first touch-screen

5. smartphone is a typical example of that. The company has various USPs for its products. Most
of the USPs usually have to do with the things with which the company differentiates itself,
therefore they often mention the sound systems and the corpus of the phone for
example:”Enhance your music with the revolutionary Harman/Kardon™ technology Clari-Fi™
which restores …”for HTC M8 or the one for HTC Desire 626 “The colorful design stands out,
making the smooth, thin body of the phone as beautiful on the eye as it is in the hand. Its sleek
finish and bold design give it an energetic look that fits your style””(23)
SWOT analysis
Strengths
- Very strong R&D. According to the financial statements of the company the R&D makes
about a fourth of the total expenses. As we have mentioned earlier HTC is known for
being a pioneer in many technological innovation.
- Being the first in the industry in launching new devices and technologies. Some of them
were mentioned earlier in the paper, however we would add some of those not mentioned
here: the first smartphone to support LTE4G connection(30), the first phone to use Beats
Audio technology the so called HTC Rezound(31), the first 1084 pixels screen(32) The
company continues its strategy of being one of the first, with its launch of ”Vive” a
virtual reality system being behind only a couple of months from google. That way HTC
was often able to secure temporary monopoly and charge premium prices. What is more
HTC has positioned itself as an innovator’s brand in the market.
- The company also has a good number of awards and recognitions in the industry
some of the most recent ones are the following:‘Best Smartphone’ for the HTC One –
GSMA Global Mobile Awards(2014),‘Best European Advanced Smartphone’ –
European Imaging and Sound Association(2014), ‘Hottest Phone of 2013’ for the HTC
One – Mobile Industry Awards(2013), ‘#1 Most Innovative Smartphone of 2013’ for the
HTC One – Business Insider(2013) and many more…(HTC,2016)
- The company has a wide portfolio of smartphones, 20 in sale for the last
year(HTC,2016)
- Strong cooperation with other companies such as Google and Microsoft.
Weaknesses
- Lack of low-price products. This can be considered as the main weakness of HTC.
While, other smartphones brands offer relatively cheap product, HTC aims for high to
middle income consumers. This is a major obstacle since the greatest demand for
smartphone devices nowadays comes from the developing world, in countries such as
India and China are for affordable devices.(33)
- Lack of aggressive marketing campaigns, common among HTC’s competitors. Аs the ex-
CEO of HTC said in an interview for the Wall Street Journal “We haven't done enough

6. on the marketing front”. The company lacks any brand loyalty that other major
manufacturers such as Apple and Samsung have.
- Not well diversified products. Firstly, up until quite recently HTC didn’t offer any other
products but smartphones. Secondly, even the smartphones offered by the company
weren’t that different between. Most of them have similar features and this can make it
hard for buyers to see each product separately.
Opportunities
- The Android operating system. All of the smartphones manufactured by HTC operate
using the Android. This gives them an advantage since almost 83% by the end of 2015 of
the demand on the smartphone market is for Android OS.(8) Thus unlike brands such as
Nokia, HTC would not be prevented to make good sales due to its operating system
- Growing market. As mentioned earlier in this paper. There is a growing demand for
smartphones in Asia and HTC can appeal to this market by developing low-price
products.
- The virtual reality technology. This product is still in its introductions stage. There isn’t
really a great demand for it, apart from some really tech-savvy geeks. However, the
market is expected to grow to more than 1 billion dollars by 2018(35). So, HTC by being
one of the first to offer virtual reality technology, would have the opportunity to
participate in the growth stage and make sufficient profits, to position itself well in the
market and establish the product standards.
Threats
- Very strong competition by some well established brands in the market. Competitors
such as Samsung and Apple have a strong brand loyalty and well established channels of
distribution. Whereas brands such as ZTE and Huawei have a dominance over the low-
income market by supplying affordable devices
- Patent wars. Both Samsung and Apple are known for engaging in long and costly court
procedures concerning intellectual property rights. Potential legislative procedures cna be
very problematic for HTC, since they don’t have the capital and power that Apple and
Samsung can spend on various legal expenses.
Marketing Mix
Product strategy
In its quarterly reports the company says the next thing about its product strategy “ Focus on
innovation and execution to enhance product proposition and keep up the differentiation.
Expand product diversity to offer customers more choices.”As mentioned earlier in the paper the
company lacks the brand loyalty its competitors enjoy. However, it has managed to differentiate

7. its products by offering specific features. Earlier the paper we mentioned that what makes HTC
phones different is their design and their sound. However, HTC doesn’t really differentiated
between its products. There is little difference between the company’s flagship M9 phone and
the other premium product offered by the company.(38) Thus consumers are often confused
being left unable to distinguish between the high and low profile products of the company. What
is more, with its last edition of HTC One, the company has been cheapening the brand by
offering a product that was supposed to be a high end but having low end features such as plastic
corpus thus breaking away from HTC’s traditional design. On the top of it HTC hasn’t been
coming with newer more competitive products for quite some time. The company keeps a more
classical image and doesn’t quite manage to satisfy the needs for more “trendy” products.(39).
Anyway, HTC has taken the decision to diversity its product portfolio and is not entering the
market of Virtual Reality. This so far is the only, action of the company that points to a policy
of attempting to follow the strategy it has laid out.
Pricing strategy
Earlier in the paper we have discussed extensively the pricing of HTC’s products. The company
offers almost no cheap products, almost all of their products are oriented towards the high and
middle income customers. In order to illustrate this further we will compare the pricing of
Samsung products to the pricing of HTC’s products. For this purpose we will use the prices
listed on Amazon, Samsung’s flagship, Galaxy S 7 is sold for about 650 US dollars in the Unites
States(40), whereas HTC’s flagship One M9 is currently sold for 660 Us dollars(23). Apparently
this is not much of a difference. HTC is not trying to compete in terms of prices. However, most
of the HTC’s products gravitate at around 400 US dollars with only the HTC Desire series being
cheaper at 230 Us dollars. On the other side, Samsung offers products for 90 Us dollars and less.
The problem of HTC is not that it charges high prices for its products, the problem is it doesn’t
offer any cheap products. As we mentioned earlier this can be a serious problem since there is a
great demand for cheap products in the emerging markets. The company is reconsidering such
actions now however this can be seen as too late since the company has missed the opportunity
of the growth stage of the smartphones in Asia.(42). Currently the company is keeping the price
of its new product Vive, well above its competitor Oculus. This is not necessary a bad thing.
While the more classical way of thinking states that people in general are driven to take rational
decisions concerning pricing, this has been proven not be true in any case. Anyway, Vive has
much more features than Oculus does and with its higher price it can actually create a sense of
exclusivity.
Distribution
HTC has serious distribution issues.While its competitors like Samsung and Apple have 3 to 4
carriers in the USA, HTC has only one. As of the end of 2013 the company has been trying to
enhance its distribution. The partners of the company haven’t been very successful at pushing
HTC’s products into the market, which has been resulting in insufficient sales for the company.

8. (43). Therefore, the company has struck a contract with a new carrier, Brightstar.This This is a
very important decision since, as mentioned earlier HTC needs to be more oriented towards the
emerging economies, one of them being Thailand This currently the biggest carrier in Thailand.
Currently HTC has 185 carriers throughout the world 4 of whom are in the USA, around 140 in
Europe and the middle east, and around 20 in asia , 3 of which are in China.(44) By the looks of
it, HTC seems to lack of significant presence in most of the Asian countries, such as India for
example. This would lead to limited exposure and diminished sales. Anyway it also probable that
the market structure in Asia is different, while in Europe there are many carriers and providers in
Asia they might be of a limited number, which wouldn’t affect HTC’s exposure. What is more,
while other smartphone brands are easily available for purchase on Amazon, HTC products are
not to be found there. Despite this HTC’s products are to be found on Ebay and a customer can
now purchase a product directly from the company’s official website. This is of crucial
importance since nowadays a growing number of people prefer purchasing items online instead
of using traditional stores.
Promotion
In a highly competitive market such as the mobile phone industry promotion has been a growing
cost for most everyone in the industry. In 2009 the company made its way with eye catching ads
and taglines. One of the notorious ones being “Quietly Brilliant” , the company also launched
worldwide advertising campaign. In the period 2009-2011 the company was also sponsoring
UEFA’s Europa league and also some cycling teams. In addition, the company hired Gary
Oldman as their official model.(45) Although, the company has been winning a lot of rewards
for the high quality of their products, they seem to have a problem communicating this with the
consumers. Realising, the inadequacy of the company to promotion compared to its competitors,
HTC attempted to take up a more aggressive promotion strategy. For example in a recent ad with
a slogan “Be different”, the main character a young parkour master, is treading over table with
apples and clones sitting around it. The connotation is more than obvious, as Apple being the
main competitor and its users are presented as faceless dolls. (youtube) This contrasts with the
active and diverse people who hold HTC phones in their hands, so the ad uses both visual and
linguistic elements in communicating its message. This current ad also appeals emotionally to
the target audience. However what HTC spends for promotion is a very small fraction to what its
competitors do. Anyway, the company also successfully uses the social media, posts about the
innovations of thе company appear both on twitter and facebook so the majority of the target
group is reached.
ROI
The company has been having a bad financial performance. For the last year revenues have
fallen with 35% and the company hasn’t been able to reduce the cost of goods sold which has

9. resulted from a net income of 1,4 billion in the past year to a net loss of more than 15 billion for
2015. The company also has a negative profit margin. The Return on Investment as calculated by
the Financial times is negative of -25%.
Conclusions and recommendation
All in all, the company is facing hard times. The sales of the company has been declining, it has
been steadily losing market share and there is little customer loyalty. Although HTC is known
for its high-quality edge of technology products it lacks the proper marketing. There isn’t enough
promotion and the company is losing market share. The company has managed to differentiate
its products by providing them with special features and design but this hasn’t been of much
avail.
There are many things the company should do to get back on its feet. Firstly, the company needs
affordable product without many features to satisfy the growing demand in India and China. This
is of crucial importance and HTC should act in time before the market reaches its maturity stage.
The company should also offer a wider variety of products since although for some products the
demand might not be that high
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