Company wants to be in top two in China by 2015

Taiwanese phonemaker HTC Corp. (TPE:2498fumbled through Q2, returning to profitability, but falling short of analysts' recovery hopes.  The report led to numerous branch office closings, including regional offices in Brazil and South Korea, along with a research facility in North Carolina.

But the phonemaker did see some hope, reporting stronger than expected growth in China. The carrier has risen from 2.6 percent of the Chinese market, to around 6 percent.

That's a big deal because, after all, the Chinese market is the world's largest smartphone market, although it is still dwarfed by the American smartphone market in pure consumer dollars.  In China, HTC is looking to compete with domestic player Huawei Technologies Comp. (SHE:002502), who owns 12.2 percent of the market, and familiar-foe Samsung Electronics Comp., Ltd. (KSC:005930), which owns 24.9 percent of the market, according to Analysys Int'l.

Ray Yam, head of HTC's China operations, has big goals for China.  At a time when other regional headquarters are closing, HTC is planning a "secret" new headquarters for China and is considering bumping its headcount, which current consists of 500-600 local engineers.

Samsung has 6,000 branded counters -- sales locations -- in China.  HTC is a ways behind, but it is fast catching up, with 2,700 current branded counters, and a planned expansion to 3,500 by the end of the year.

HTC Sign
HTC aims to expand its Chinese presence this year. [Image Source: Cult of Mac]

HTC is trying to build its brand in China, and is in the third year of selling phones under its own name, having sold under the trade name Dopod pre-2010.  Over the next two quarters, Mr. Yam told The Wall Street Journal that he hopes to conquer an additional 3 to 4 percent of the Chinese market, which would position his firm to vie for second place in sales.

By 2015 HTC wants to be one of the top two brands in China in revenue.  That likely means holding off Huawei and rising star Apple, Inc. (AAPL) whose products have become status symbols among Chinese teenagers.  But if HTC can do that, it may be able to salvage its bottom line in the midst of poor European sales and currency fluctuation woes.

After all, by 2015 China's smartphone sales are expected to rise from the current 150-170 million units per year to about 300 million units per year, along with great growth to premium smartphone sales, as the nation's growing class of affluent professionals look to exert their buying power on the world of gadgets.

HTC's flagship One X and One S have drawn generally enthusiastic reviews.  Writes AnandTech's Brian Klug, "The One S has an absolutely phenomenal in-hand feel" and "it blows my mind that Samsung can't get its own AMOLED panels tuned this well."

Source: WSJ

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