By Star Chang, posted Oct 16, 2012 at 11:04 AM, 789 views,

Samsung’s Deep Price Cut May Affect HTC Sales in China

A deeper price cut on Samsung’s flagship smartphone during China national holiday might hurt sales of Taiwan’s HTC in the coming months. On Sept. 30, Chinese retailers cut prices on the Samsung Galaxy S III, which sold at around 3,750 Chinese yuan (US$599), three-quarters of its original retail price of 4,999 yuan when it went on sale during June. Chinese electronics retailers generally cut prices on cell phones by 100 to 200 yuan (US$16-32) during promotional periods. While the price cuts will translate into a thinner profit margin for Samsung, but it has helped the Galaxy S3 model maintain its position as the best-selling phone in some retail channels in China …

Chinese retailers have cut Galaxy S III’s prices by a whopping 25 percent discount, more than any other cell phone model. The phone status as a high-end smartphone still could give the retailers more room to lower prices. This could hamper HTC’s sales in China. HTC, the world’s No. 5 smartphone maker, has intensified its onslaught on the China market, where smartphone sales are forecast to hit 300 million units in 2013. HTC will ship 32.3 million smartphones for the whole of 2012 and 25 percent will go to China. Before Samsung’s promotion, HTC has already dropped its strategy of flooding the market with multiple models and is shifting its focus to just a few selected models in various price categories.

HTC currently concentrates its promotional efforts on three categories — low-end smartphones at 1,999 yuan (US$315), mid-end ones at 2,499 yuan (US$393) and high-end handsets at over 4,000 yuan (US$630). HTC reported third quarter consolidated revenue of US$2.4 billion, down 23 percent compare to previous quarter. Analyst said that the weak third-quarter figures is because of a slowdown in demand for the company’s low-end products in China. Demand has been hurt by domestic smartphones’ brand too, which sell at low cost with high specification.

SOURCE: FOCUS TAIWAN