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Ambitious TCL targets US, China with smartphones

TCL is yet another of those lesser-known Chinese firms edging its way up the global handset charts.

It shipped 8.52m devices in Q1, or 2.0% of the worldwide total, placing it seventh between Huawei and Sony in Gartner’s rankings.

These days Chinese vendors occupy five of the world top ten spots, admittedly with a combined market share below second-ranked Nokia.

And although smartphones is where the action is, TCL’s story at the top end of the market isn’t too shabby, either. After nearly doubling shipments in Q1, smartphones accounted for 17% of units shipped and nearly half of handset revenue. In the last three months it’s increased that to 27% of all devices sold.

The other TCL wrinkle - apart from its use of the old Alcatel brand - is that it tends to do most of its business outside China. In Q1 offshore sales totaled 80%, mostly to EMEA and Latin America.

But TCL is trying to change that. TCL Communication CMO Dan Dery says it’s targeting the US and China with its mid-range smartphones, such as the Idol X, which it launched in Hong Kong on Monday.  

He described China as “really a new market." Whereas Euope and Africa are TCL replacement markets, the massive China market is mostly virgin territory.

“Even though it takes more time, because of its structure, our intention is to get strong in China and strong in the US as well,” he said.

Both countries - the US in particular – require a presence in operator channels. Dery cites TCL’s sales to 180 markets globally and relationships “with some of the most demanding carriers in the world.”

While the company seems to have hit a sweet spot, with revenue tripling over the last four years, it’s still a small outfit.

Total sales last year topped HK$12.031 billion ($1.55b), with a gross margin of 17.4%. Despite that it came in at a HK$220,000 loss on higher R&D and sales costs.


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