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HTC to consider diversifying chip suppliers for 4G LTE

TAIPEI -- Struggling Taiwanese phone-maker HTC Corp. will consider diversifying its chipset suppliers for lower-end 4G LTE phones as part of a strategy to reduce costs and win back market share, a company executive said Monday.

“Globally, 4G phones are expected to roll out in phases, beginning with high end products,” Jack Tong, HTC's head of China and North Asia, told CNA on the sidelines of the company's year-end party, held jointly with Chunghwa Telecom Co., Taiwan's largest mobile service provider.

“When mid-tier or budget 4G phones actually hit the market, we will certainly evaluate the situation, because HTC has always focused on technology development,” Tong said in response to a question of whether HTC will continue its multi-supplier strategy currently employed in its new mid-tier HTC Desire series.

The senior executive said lower-end 4G phones with “high performance to cost” value will easily gain traction among young consumers, while HTC will continue to offer value-added services in its premium 4G models.

Commenting on Taiwan's 4G device market, Tong said HTC expects a boom in its home turf in the second half of 2014, when the company aims to become the country's biggest manufacturer of 4G phones thanks to its offering of complete product lines.

Tong's remarks came a month after HTC released four mid-range HTC Desire phones in Taiwan Nov. 27 by enlisting new chipset partners such as ST-Ericsson, Broadcom Corp. and Spreadtrum Communications Inc.

That indicated that the Taiwanese smartphone maker is moving away from its long-time partner, Qualcomm Inc., in an effort to tackle the stiff competition from low-cost phone manufacturers like China's Xiaomi Corp.

Lin Kuo-feng, president of Chunghwa Telecom's mobile business group, told reporters at the year-end party that high-end models are projected to make up nearly half of the carrier's total 4G LTE phone purchases in 2014.

Chunghwa Telecom plans to build 3,000 4G base stations in six major metropolitan areas in Taiwan next year, and will increase the number to 6,000 in 2015 and 9,000 in 2016 when it rolls out 4G coverage to medium and small cities, Lin said.

HTC shares ended down 1.81 percent at NT$135.5 (US$4.53) in Taipei trading Monday, lagging behind a 0.57-percent rise in the broader benchmark index.

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