HTC Corp Plans Price Reduction to Bolster Sales

HTC Corp Plans Price Reduction to Bolster SalesHTC Corp wants to improve its sales. That is why the Taiwanese smartphone manufacturer has announced plans to lower price tags of its devices in hope that doing so would bolster its current sluggish sales. This move comes after the company reported a quarterly loss last month, its first ever in its history.

During a recent investors’ call, HTC said it plans to sell handsets in a broader price range. It refused to state specific costs but it is quite logical that the company meant introducing lower price tags. However, it assured that it would still prevent getting into the ‘ultra low-end’ segment of the market.

The company asserted that pricing pressure has always been there. It assured its investors that brand is as important as price performance and time-to-market. HTC aims to do well in combining those factors.

Disappointing third quarter loss

After a weak third quarter, HTC seems still unable to get back to its feet. It has forecast its revenue in the fourth quarter to range from $1.4 billion to $1.5 billion. That would still be lower than the general market expectation of about $1.77 billion.

Weak financial performance was logically blamed to dismal sales of its smartphones during the period. This came as no surprise as competition within the industry continued to be more intense. In general, the high-end smartphone market has also been showing signs of saturation.

Several other internal issues

Aside from sluggish sales, HTC is also dealing with other internal issues. Matthew Costello, its Chief Operating Officer, stepped down from his post last summer amid the company’s declining sales. However, he remains with the company but was eventually assigned to become an executive advisor to European operations. He was the seventh executive of HTC to leave the post this year.

HTC has also spent a considerable amount of money for advertising efforts. It has tapped Robert Downey Jr. several months ago to become its celebrity endorser. The Hollywood actor was featured in a series of TV commercials where he announced the new catchphrase of the company: “Here’s To Change.”

That two-year ad campaign reportedly costs the company up to $12 million. The ad effort is yet to translate to higher sales. But based on preliminary information, the initiative has already increased advertising awareness of HTC by 12% and its brand momentum by up to 15%.

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About the author

Drew is a regular contributor covering trending topics.