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Even though some of the world's biggest smartphone makers are focusing on low-end phones in emerging markets, Taiwan-based HTC is making the case that there is a market for high-priced phones in China.
At a new product launch in Beijing Tuesday, the company said it is teaming up with chinese social-media company Renren Inc. (RENN) to launch a handset with software integrated with the social-networking site, similar to a phone HTC released earlier this year in cooperation with Sina Corp.'s (SINA) Weibo microblogging service. It also said it would release five products in the Chinese market in November and December, including its Sensation XE and Evo 3D, and a separate phone that features dual-SIM card capability. The price range of the three phones for which it gave prices was 2099 yuan (US$330.00) to 4880 yuan.
In recent quarters, HTC has made increasing noise about growing in the China market, a move analysts say will be key for the world's fourth-largest smartphone maker by shipments, as smartphone demand in developed markets like the U.S. and Europe cools.
But analysts have argued HTC could face difficulty breaking into the China market due to relatively weak brand recognition and phones that are too expensive for the market. With prices above 2000 yuan, HTC's phones are significantly more expensive than 1000 yuan offerings from Chinese smartphone makers like Huawei Technologies Co. (HWI.YY) and ZTE Corp. (000063.SZ).
According to research firm IDC, HTC was ninth in the China market with a 3.3% market share in the second quarter of 2011, though HTC said in the third quarter its sales grew more than nine times in China from the same period in 2010.
At a separate media meeting on Monday, HTC Chief Executive Peter Chou said he believes there is room for smartphones above 2000 yuan but that offering cheaper phones into developing markets could erode the company's brand value.
In a statement released by the company Tuesday, Chou also said that the company would continue to invest in research and development and marketing in China.
In an interview last month, HTC's chairwoman Cher Wang said the company would continue to grow in China and that it had a good relationship with all three of China's major service providers.
She also said at the time the company has an advantage in the China markets due to the shared language and culture of China and Taiwan.
-By Paul Mozur, Dow Jones Newswires; 886 2 2502 2557; firstname.lastname@example.org