HTC Mimics Apple Marketing Strategy to Regain Customers

HTC Corp. (2498), once content to stay behind the scenes in the smartphone industry, is attempting to regain lost market share by changing its marketing strategy to be more like Apple Inc. (AAPL)

The phonemaker, which built itself by allowing wireless carriers to put their own names on its phones, has been increasing advertising spending to make the HTC brand stand out for its audio, camera and design capabilities, said Jason Mackenzie, global president of sales and marketing. He declined to provide spending figures.

HTC, the Taoyuan, Taiwan-based maker of Desire, Sensation and One smartphones, is trying to keep up with Apple and Samsung Electronics Co. (005930) after competition halved its global market share to 4.5 percent in the first quarter from a 10.7 percent peak in the second quarter of last year, according to data compiled by Bloomberg Industries. It recovered some ground in the second quarter, increasing to 5.8 percent of shipments.

“We need to be more bold,” Mackenzie said in an interview in New York. “We’re not satisfied with where we are.”

The company, whose advertising slogan is “Quietly Brilliant,” ran its first television commercial in the U.S. in November 2009. The goal is to increase familiarity with the brand so that consumers are already thinking of buying an HTC phone instead of an Apple iPhone or Samsung’s Galaxy S III before they walk into a store, Mackenzie said.

Dre’s Beats

Advertising messages will focus on the phones’ camera feature, which allows users to take pictures during filming of a video, and audio, which uses technology from rapper Dr. Dre’s Beats Electronics LLC, in which HTC has a stake of about 25 percent.

“We’re shifting our marketing spend to have HTC communicate directly with the consumer,” Mackenzie said. “Apple changed the landscape.”

HTC doesn’t have the resources to permeate the market with advertising to the extent that Apple and Samsung do, the company said. They’ll supplement advertising through public relations and by communicating with online communities of fans, said Sally Julien, a spokeswoman.

HTC’s sales have missed analyst estimates for the last four quarters, according to data compiled by Bloomberg. Last month, the company forecast third-quarter revenue that was as much as 22 percent below the average estimate.

HTC shares have fallen 49 percent this year. They slipped 1.2 percent to NT$254 today in Taipei.

To contact the reporter on this story: Sarah Frier in New York at sfrier1@bloomberg.net

To contact the editor responsible for this story: Nick Turner at nturner7@bloomberg.net

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