HTC's headquarters in New Taipei
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Taiwanese smartphone maker HTC will regain its market share in the global market in 2013 once it is able to address its current sales and marketing issues, Goldman Sachs predicts.
In a research note dated July 16, Goldman Sachs, the fifth-largest US bank by assets, said that HTC's market share in China in the high-end over-1,500 yuan (US$235) segment increased to 13.3% in May, ranking third in the segment, up from 6.4% in April.
The strong momentum indicated that HTC's China business is showing some resilience in demand since the launch of its One series in the high-end market and the New Desire series in the mid-end segment, the note said.
"We believe it will nevertheless have implications for HTC's other regional markets," said Goldman analyst Robert Yen, noting the performance in China's market will not be strong enough to offset HTC's weak sales in the US and Europe.
Yen stated that HTC has used unique marketing strategies with a local focus to get its product features and design philosophy across to its customer base in China, widely known as a very price-sensitive smartphone market.
These strategies, such as online micro movies, city road shows, a collaboration with Sina Weibo and using a local pop star as spokesman for its products, are rarely seen in HTC's marketing in the US and Europe.
It shows that HTC's current market problems in the US and Europe are not caused by its smartphones being too expensive or by its product designs not being competitive, but rather by the sales and marketing problems, according to Goldman.
"We expect HTC to continue revamping its sales and marketing team in the US and Europe," Yen said.
"We believe adjustments in strategy will take time to bear fruit, but that this sets the foundation for a rebound in market share in 2013," he noted.
In terms of 2012 shipment growth by region, however, Goldman expects HTC's shipments to drop by 68% from last year to 6.7 million sets in North America and by 38% to 5.8 million phones in Europe.
On the contrary, HTC's shipments in China will jump 105% from last year to 6.4 million devices, while those in other Asian markets and the rest of the world are forecast to rise 18% to 13.1 million phones, the bank said.
Given the estimated 28% drop in HTC's total shipments this year, Goldman has cut its target price for
HTC to NT$280 (US$9.35) from NT$360 (US$12.02) and kept a "neutral" rating on the stock.
HTC shares closed up 3.83% at NT$298 (US$9.95) Tuesday in Taipei
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