HTC dials into China market, but who will answer the call?

Taiwan's flagship smartphone developer HTC is dialling into the mainland's middle-tier market to rebuild its global brand after a long decline, but industry analysts warn of stiff competition from lower-priced, similar-quality local brands.

The 17-year-old company had 10.7 per cent of the world market share at its peak in 2011. It expects urban mainland consumers to buy its Desire, Butterfly and One E8 series phones because of their mid-range prices and features closer to the iPhone than cheap white-box models, industry experts say.

"HTC will need to demonstrate to consumers they have something interesting and unique that their rivals don't, which may be a tall order, given a fairly unattractive product line-up outside of its flagship HTC One, which is well out of range for mid-tier buyers," said Mark Natkin, managing director of Marbridge Consulting in Beijing.

Failure to capture a share of the mainland's middle-tier consumers - those who can pay 1,000 yuan (HK$1,260) to 2,000 yuan per handset - would further dent HTC's long-term market share, relegating the Taipei-listed firm to a niche brand or, in the extreme case, lowering its value to buyout levels.

"I think HTC is going to shrink till it costs less so someone buys it," says John Brebeck, chief executive of wealth management firm SRG Financial Services in Taipei.

HTC says it has released about 50 models on the mainland since late 2010. It declined to comment further on its mainland plans.

Last month, it picked the mainland for the launch of its E8, a 2,784-yuan model that features a plastic chassis with many of the specifications of the high-end One M8.