You might not have heard of TCL. They’re the twenty fifth largest electronics manufacturer in the world, the third largest television manufacturer, even building televisions for Samsung. They own the Alcatel brand and manufacturer these devices too, which to date have been budget-orientated devices. Now, Chairman Li Dongsheng has written about HTC in his Weibo account. The post discusses Cher Wang, HTC’s chairman and founder, giving a favourable comparison to Steve Jobs. At the bottom of the post, Li said that he hopes HTC will make a comeback and that Taiwanese companies to stick together to be challengers for Apple and Samsung. Some commentators have considered this to be something of an offbeat comment that maybe TCL and HTC could be planning to tie the knot and that would be interesting. TCL turned Alcatel around a few years ago and have given the brand a new lease of life.
HTC are a manufacturer of acclaimed devices that have been under immense pressure. In simplistic terms, Samsung and Apple have much bigger marketing sticks. If I were to be cynical, Samsung buy up massive amounts of retail space and consumers see a lot of Samsung marketing. Apple have a reality distortion field that’s projected by their devices. HTC make products that are, in broad brush terms, comparable to anything else in the market today but have significantly less cash to spend on their products. They have also made a few mistakes in their product line ups and, crucially, are missing out in the higher growth, lower cost end of the market (something that Samsung and Apple are also doing). HTC are in a difficult place: do they “cheapen” the brand and sell inexpensive but potentially lesser quality devices? Or do they stick to competing with their more expensive peers? In HTC’s last results, they made a profit because they cut costs but this measure can only go so far. They need to shift more boxes.
If TCL were to buy, or invest, into HTC we might see some cross pollination between Alcatel and HTC. I think it’s more likely that HTC will be able to use TCL / Alcatel’s might to reduce manufacturing prices and promote the handset. Motorola have shown the established Western smartphone manufacturers that it’s possible to reinvent a budget device with the Moto G. This is the sort of fairydust that could be used to invigorate HTC.