In April last year, HTC cooperated with China Unicom (Hong Kong) Ltd to launch its first entry-level smartphone - the four-inch HTC Desire V - to mainland customers.

In addition, Yam said HTC had partnered with different mobile Internet companies to form a micro-ecosystem in which people work together and develop cutting-edge technologies and products with new customer experiences.

"To discover a sustainable development method in the mainland is the most important achievement for us," Yam said.

When it comes to distribution channel construction, Yam said HTC slowed the pace of opening brick-and-mortar stores because it noticed the significant rise of e-commerce sales on the mainland.

"More people are turning to the Internet for mobile phone purchases, which forced us to change our marketing strategy," Yam said. HTC had about 3,000 branded counters by 2012, reduced greatly from the previous goal of 4,000.

Li Yanyan, an analyst at Analysys International, said HTC could benefit most from e-commerce business. "HTC lags behind Samsung and Nokia in its number of physical stores but online outlets may help HTC narrow the distribution gap with its rivals," she said.

The company stepped up its pace to construct a self-owned e-commerce store and cooperate with third party online retail giants such as 360buy.com and Taobao.com. "The online platform can easily reach customers in tier 2, tier 3 cities, areas where HTC has not much of a presence," Yam said.

Sandy Shen, an analyst at Gartner China, said the most severe challenge for HTC's business in the mainland is the lack of unique products that appeal to customers. "Compared with Apple's iPhone and Samsung's Galaxy series, it seems HTC has not come up with same-level, popular handset models."

For worldwide smartphone vendors, the importance of the Chinese mainland cannot be overstated, especially for companies such as HTC that reached a crossroads. "The scale of the mainland smartphone market just blows you away. Never has there been one market that exerted so much influence," said Wong Teck-zhung, a senior market analyst at IDC Asia-Pacific.

Contact the writer at shenjingting@chinadaily.com.cn

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