Ajay Sharma
The Taiwan-based diversified HTC Corp is a leading player in mobile phone innovation and design. Founded by Cher Wang (chairperson) and Peter Chou (president & CEO) in 1997 HTC entered the global markets under the HTC brand name only in 2006, after establishing itself as a leading OEM for many mobile brands. Today its brand portfolio is a mix of PDAs, smart phones and touch screen devices on both Linux and Windows platforms. HTC India was set up in June 2007 and markets 16 devices in GSM and CDMA models in the price range of Rs 10,500-43,000. Senior Correspondent Onkar Pandey meets HTC India country head Ajay Sharma to understand the company’s strategies. Excerpts from a telephonic interview:
Where does India fit into HTC’s global plan and how has it turned out for you?
India has been very good for us so far. Our performance in the last two years has shown substantial growth. In the first year (2007), we sold 100,000 units which grew by three-fold last year.
You are competing with several dominant players offering smart phones in this market? What are your strategies to grow in this increasingly tough market?
True, there are various big brands present here. But the difference is that most of them offer mostly feature-phones and not smart phones, may be except perhaps Nokia. Going by the available statistics, we are the number two player in smart phones in this market.
What is the USP of HTC phones and how good is your brand awareness?
Any typical tech-savvy user knows us very well. If you talk about typical normal customers, I would say that we have gone beyond the typical smart phone customers and today we are catering to the likes of any one who is willing to spend a higher price to buy a technologically-advanced devices with added features, values.
What, according to you, are the reason for your success in the smart phones category?
Innovation and technology. We are the first to push the 2.8 inch screen size aggressively here, besides offering innovations like mail attachments etc. We believe that we must focus on product differentiation, be it the hardware or software. Currently our focus is more software which primarily means the user interface, which is interactive, intuitive and customer-friendly. These features are our strong points.
What is the market size and growth rate of smart phones here and where do you stand in the market share sweepstake?
The market size for smart phones is close to 1.5 million units a year, which is just two percent of the total mobile devices sales in the country. With sales of around 3 lakh units last year, HTC has a share of 20 percent. I am sure that the smart phone market will grow further and faster in this market.
What’s your marketing plan?
As I mentioned earlier, we rely a lot on innovation and technology, rather than pricing and marketing. Our focus is primarily on product and distribution, supported with good sales and service efforts. We don’t just sell only on price; but on the good experience of the brand.
You’ve some bundled sales agreement with Airtel and Reliance. How has it helped you and what will be the way forward for your distribution?
Globally, we believe very strongly in working with mobile operators because while we sell handsets and they sell services, what the customer looks forward to is a total offering. So, we try and make the offerings go beyond the hardware by working with leading operators for bundling of services and offer good value to customers. This will continue to be our prime focus in the future too.
Does that mean independent retailing is not that strong on your radar?
It’s not that all devices go through the operator channel. There are some devices where we’ve a very strong value proposition for us, for the operator and for the customer, where we try and bundle the services. Then there are some devices where we feel we should go direct to the customers, so we will have both the options open.
Rural telephony is the way forward in this market, where smart phones wouldn’t be that competent. How do you see this opportunity?
This year, our focus is going to be up to Tier 2 cities. Since some minimum GPRS support is required for data-centric devices like ours, wouldn’t really like to look at the rural market immediately. As is already happening in the metros, the replacement market will start in the rural areas too and that will be the time when data services would be in more demand; and that would be the time when we would start seriously looking at the rural market. And I see this happening at least two years from now.
How has been the response to your G1 Android phones launched recently here? With very few Linux users as Windows still dominating the desktop market globally, do you think the Android phones will succeed here?
I think it should happen this year. There are two issues here: the primary operating system here is Windows which is close to 80 percent of the market. I don’t go on the basis of what operating system the device has, even our Windows-based phones offer very good features like push-mail.
On the Linux platform, what we are trying to focus on is more on the user interface, and not so much about back-end things like the operating platforms. So our focus is the total experience of the device and not just operating system. Besides, we have the Windows-based phones, too.
Has the ongoing slowdown affected your industry in general and HTC in particular considering the higher price-caps your models have?
It would be wrong to say that it’s not making things difficult for us. But, we are ensuring that we continue to maintain a decent depth in the market and exceed the volumes of the last year. We are finding it more challenging, but still managing our targets as on now.
Overall, I think that our strategy has worked for us till now, barring some minor adjustments to take care of the current market situation where we need to do little bit of fine tuning etc.
What is your target for 2009 in terms of sales and revenues?
We are targeting a sale of at least 500,000 devices this year. Since the model-mix keeps changing, I can’t say what models will come at what price-points.
Five years down the line where can we see HTC India?
It’s a very long period for me to predict. But, all I can say is that as we move into 2010 I would like to touch the one-million-mark.
What new product can we expect from HTC this fiscal?
A lot of new products are in the offing such as higher resolution camera, Qwerty keypad devices and 3G when it is available here, which I hope would be any time now.
What is the market size and growth rate of smart phones here and where do you stand in the market share sweepstake?
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