The HTC brand has been known for its touch screens. Now it expects Google’s Android-powered phones to add to its sales.
Three years ago, a closely-held personal digital assistant (PDA) phone and smartphone provider — Dopod Communication (India) Pvt Ltd — silently entered the Indian market with three new handset models.
“No one took us seriously. We initially operated out of a small business centre in New Delhi,” recalls Ajay Sharma who was recruited in December 2006 to handle Dopod’s Indian operations. The company sold around 2,500 handsets on an average per month even as it competed for the high-end cellphone segment with other smartphones like the iMate and O2.
“Both the Dopod management and myself were not satisfied with the sales figures. But competition was tough,” says Sharma.
The tide, then, changed. In May 2007, Taiwan handset major HTC Corporation acquired Dopod India. “All of us were taken under the HTC fold, and our fortunes changed for the better,” says Sharma. The results of being taken over by a strong brand showed up in 2007 itself with HTC India having sold 80,000 handsets as against the original estimate of around 30,000.
Founded in 1997, HTC made its name as the company behind many of the most popular operator-branded devices on the market. HTC’s success is driven by its research and development (R&D) skills. Nearly 2,500 (25 per cent) of its 10,000-strong workforce are dedicated to R&D, explains Sharma.
The timing was right. The Indian mobile market was picking up steam, and high-end users wanted business phones which were simple to use. Moreover, while most of the business phones were stylus-operated, HTC introduced touch-screen models. Even the iPhone had not been introduced in India (only grey market phones were available). “These (HTC touch-screen models) became very popular, and so we became very ambitious and increased our target to 25,000 handsets per month,” points out Sharma.
HTC India’s target audience was anyone who was over 18 years of age, and had Rs 15,000 or more to spare. The company was among the first handset makers to advertise on television.
Another strategy which worked for Sharma was HTC’s global policy to work with telecom operators unlike other handset makers like Nokia. HTC has established unique partnerships with key mobile brands, including the leading five operators in Europe, the top four in the US, and many fast-growing Asian operators. It was only in June 2006 that it introduced products under its own HTC brand.
But HTC faced a problem in India. Unlike the West where telcos like Sprint and Verizon subsidised the cost of handsets by bundling data plans, no such model existed in India. “Hence, we tied up with the largest private telco in India — Airtel — which, instead of subsidising the handset cost, introduced free data plans to lure buyers,” says Sharma. Airtel customers across India would get free data download of around 60 MB per month for around six months.
The results started to show in 2008 when HTC India managed to introduced nearly 16 models of which over 90 per cent were touch-screen ones. The company managed to sell close to 300,000 devices by end 2008.
The model with telcos has matured over the last two years, and HTC India extended this telco-driven model to CDMA player Reliance Communications, too and later to Idea Cellular.
This year, the company has added another feather in its cap with the launch of India”s first Android-powered phones (popularly known as Google phones). And in keeping with its strategy, Airtel users of both its models — the HTC Magic and HTC Hero — across India get free data download of 100 MB per month for six months. Airtel customers will also be able to avail many utility-based applications such as Portfolio Manager, Hello Tune Manager, Weather Channel, Mobshare, In-mobile search and City Search on the HTC Hero.
“The Android-powered phone introduces a more natural way for reaching out to people and accessing important information in a much more easier and hassle-free manner. It has a fully customised user interface called HTC Sense which helps create a distinct experience which is more engaging, immersive and intuitive,” says Sharma.
Currently, 80 per cent of HTC India’s sales come from the top 10 cities where it competes with other business phones like RIM’s Blackberry (which also follows the telco-driven model) and other big players like Nokia who have also introduced touch-screen models.
Sharma is unfazed. “Users love our touch screens. Going forward, we will look at the top bracket of users in Tier II cities too,” says Sharma, adding: “The Android-powered phones will definitely generate more sales. We expect to close 2009 by selling around 400,000 handsets.”
But won’t the launch of Apple’s iPhone 3GS dent the sales of HTC since both are touch-screen models? Sharma points out that HTC has around 12 models currently that are priced between Rs 10,000 and Rs 40,000. “The iPhone 3GS is a good phone,” he admits, “but it can only affect, if ever, the sales of the HTC model that competes with it in its price range.”
