HTC prepares to launch lower-end "Kewang" smartphones for China

IDG News Service - HTC on Monday announced the first of a new series of lower-end smartphones designed specifically for China, as the company expands its handset offerings in a key market.

The HTC Kewang V, or Desire in English, will launch on April 23 through mobile operator China Unicom. The smartphone comes with a 4.0-inch touchscreen, a 1 GHz processor, and Android 4.0, at a price of 1999 yuan (US$316), without an operator contract .

The price puts the device closer to the lower-end of the Chinese market, as mobile operators including China Unicom have been pushing international handset vendors to offer less expensive smartphone devices at the 1000 yuan no-contract price range, according to analysts.

HTC unveiled the Kewang line of smartphones under the code-name "Dragon" earlier this year. It also plans to offer soon Kewang handsets through the country's two other mobile operators, China Telecom and China Mobile. Together, all three of the country's telecommunication carriers have more than 1 billion mobile phone subscribers.

HTC's goal with the Kewang series is to provide smartphones at a low price, but also with high-performance and strong features, said Ethan Qian, an HTC spokesman. The Kewang line is being released only in China, he added.

For 2011, HTC had a paltry 2.8 percent share of China's smartphone market, according to research firm Canalys. But the Taiwanese smartphone maker has been investing more resources and tripled the number of HTC retail stores in China to 2,000 last year.

The company also released this year one of the first Windows Phone 7.5 handsets for Chinese users, and has started accepting pre-orders for its new HTC One X flagship phone. The two devices are priced at no-contract for 4399 yuan and 5688 yuan, respectively.

In the past, China's lower-end smartphone market had been largely dominated by domestic smartphone vendors, such as Huawei and ZTE, said Nicole Peng, a research director with Canalys. But more international handset vendors including HTC, Nokia and Motorola are releasing lower-end smartphones to tap into this large segment of the market, she said.

"There is a huge demand for smartphones and HTC is a very reputable brand in China. They can attract a lot of users," she said. "To appeal to a wider segment of the market, (HTC) needs to have more devices and needs to be working with the different mobile operators."

HTC has reported disappointing financial results for the last two quarters, brought on by fierce competition from Samsung and Apple. The company however expects its earnings will return to normal this second quarter as its HTC One X device arrives in major markets.