Source: Bloomberg News | 2013-1-18 | NEWSPAPER EDITION
TO take on Apple Inc and Samsung Electronics Co in the global smartphone market, China's TCL Corp is enlisting a mighty ally: Iron Man.
In a product-placement deal for Paramount Pictures Corp's third "Iron Man" movie, Robert Downey Jr's character Tony Stark will battle his latest nemesis, the Mandarin, using TCL products. Some real-world features, such as handheld devices interacting with televisions, will be replicated on-screen.
TCL, which also makes camcorders and rice cookers, is doing whatever it can to move upmarket, a familiar path taken in previous decades by Japanese and South Korean electronics and car companies. Along with compatriots ZTE Corp, Huawei Technologies Co and Lenovo Group Ltd, TCL is seeking to expand sales and brand credibility by convincing overseas consumers that their smartphones are just as advanced and appealing as those offered by market leaders.
"I think they are good enough for a certain segment of the market," Andy Hargreaves, an analyst at Pacific Crest Securities LLC in Portland, Oregon, said. "It's a pricing game, if they can come in with a lower price, they can probably gain share."
More than 1.2 billion smartphones will be sold this year, according to Gartner Inc, surpassing record sales of 821 million units in 2012. Consumers and businesses are increasingly opting for versatile and powerful handheld devices over personal computers, the Stamford, Connecticut-based researcher said.
Founded in 1981, Huizhou, China-based TCL is a seller of appliances, telecommunications devices and home electronics.
Apart from its own brand, the company, which employs 60,000, manufactures Thomson TVs and Alcatel mobile phones.
"I believe our new generation of products are as good as those from Samsung and Apple," Tomson Li, TCL's chairman and co-founder, said at the International Consumer Electronics Show in Las Vegas last week. "This Iron Man cooperation is very useful for us to promote the TCL brand in the global market, including the US and China."
To support the marketing effort, Li sealed a deal last week to rename Grauman's Chinese Theater in Los Angeles as TCL Chinese Theater, buying naming rights for the cultural landmark along the Hollywood Walk of Fame.
Even so, movie magic and impressive technical specifications may not be enough to convince buyers and retailers to take a risk against more established names, according to Stephen Baker, an analyst at NPD Group Inc.
"They don't have a track record," Baker said. "Consumers don't know who they are, but also distribution channels don't know who they are, or don't trust them. If that's what they think it takes to get trust and sales, then there's a misreading of the electronics business in general."
Lenovo, the world's second-largest PC vendor, is another company trying to expand its global footprint with smartphones. While it's the only Chinese enterprise to rank among the world's top technology brands, the Beijing-based company still trails Apple, Samsung and Sony Corp, according to researcher Strategy Analytics.
CEO Yang Yuanqing is betting that Lenovo's computing credentials will convince consumers to cross over to its mobile devices.
"We call our strategy a PC-plus strategy. When a phone becomes a smartphone, the voice conversation is not a key use," Yang said at CES. "Surfing the Internet and checking e-mail becomes the key application, so that's similar to a PC."
Lenovo plans to increase its marketing budget this year with a focus on consumer devices such as its K900 smartphone and Yoga touch-screen laptop, Yang said. The Horizon Table PC, another product unveiled at CES, features a 27-inch (69 centimeter) touch-screen panel that enables multiple users to play games.
"We don't have a strong brand," Yang said. "Particularly with smartphones, you need to expand into the telecom channels, you need to spend money."