HTC announced on Saturday that it’s shutting down its Sao Paolo offices and pulling out of Brazil altogether, in the face of intensifying competition in what is one of the world’s fastest growing smartphone markets.
The move, which was first reported by the Brazilian magazine Exame, means that the Taiwanese manufacturer will not be going ahead with its planned launch of the HTC One series, while dozens of employees are expected to lose their jobs. The company will continue to provide support services for existing customers, however.
A spokesperson for HTC told AndroidPIT that the decision to pull out of Brazil was made following an “analysis of sales numbers.”
HTC’s decision to pull out of Brazil comes as something of a surprise, considering that the market is expected by some analysts to overtake the UK and become the fourth most important in terms of sales by 2016. With HTC’s well documented struggles in the US and European markets causing the Taiwanese company further problems, it was felt that the Brazilian market was one in which they could potentially shine, but recent sales figures show that this hasn’t happened.
According to the latest figures from StatCounter, HTC had a particularly dismal showing in the first quarter of this year, commanding a meager 0.11% share of the Brazilian market.
One of the main problems faced by HTC is its insistence on sticking to high end smartphones. Recently, HTC’s CEO Peter Chou reaffirmed that his company had no plans to sell “cheap, cheap” smartphones in developing markets, yet low-end models from the likes of LG, Motorola and Nokia are precisely what is driving the rapid growth in Brazil’s market.
HTC has to be admired for sticking to their principles, and this policy will ensure that the company can maintain the high quality of its devices, however it remains to be seen if such a strategy is a smart one from a purely business perspective.
Analysts believe that HTC is now likely to focus on emerging Asian markets such as India and China, as well as its home nation Taiwan, where it has already made moves to corner the local mobile banking sector. HTC has a significant advantage in Asian markets, where it is already an established brand and where considerably more room for growth remains in the mid-to-high end smartphone sector.