Upstart phone maker taking run at the top
Chances are you’ve never heard of Alcatel OneTouch, but the Chinese brand of low-cost handsets has become the fifthlargest smartphone seller in North America, surging from the No. 13 spot it held at the end of 2013.
Eight of every 10 smartphones shipped during the first quarter of 2015 were made by Apple Inc., Samsung Electronics Co. Ltd. and LG Electronics Inc., but Alcatel OneTouch’s fifth spot translates into a market share of nearly four per cent, a steep rise from the 0.5 per cent it commanded 18 months ago.
It shipped 100,000 devices in the final quarter of 2013, but more than one million in the following quarter and it has kept on growing since then.
“That’s phenomenal for anybody to increase by 10 times,” said Ken Hyers, who tracks the mobile handset business for Boston-based consultancy Strategy Analytics and compiled the data above. “Alcatel has its sights clearly set on ZTE,” which sits in the fourth position with a five-per-cent market share.
Both companies make devices with mid-tier features that have an entry-level price for the cost-conscious, capitalizing on a supply chain that has made components that were for premium devices last year more economical.
Alcatel OneTouch, a brand of Hong Kong-listed TCL Communication Technology Holdings Ltd., has plans to eclipse rival ZTE Corp. by the end of 2015.
“It’s difficult to take on a No. 1 or No. 2 from a No. 13 position,” said Steve Cistulli, who manages the vendor’s operations in North America. “Any David that wants to take on the No. 1 or No. 2 or No. 3 Goliath right away needs to step back with a practical approach and say, I still have No. 12, 11, 10, 9,8, 7, 6, 5 and 4 in front of me, as well.”
Hyers attributes Alcatel OneTouch’s growth in the U.S. — where almost all its North American market share is located — to offering unlocked handsets that can connect to an array of wireless networks. There is a small but growing consumer segment that prefers not to be tethered to a specific carrier.
But according to Hyers’ statistics, Alcatel OneTouch is faring poorly in Canada, where Telus Corp., Bell Mobility and Vidéotron Ltée sell its devices. It is tied with another Chinese vendor, Huawei Technologies Co. Ltd., for last place of the 12 vendors Hyers tracks.
Cistulli wants to change that and he’s making a big push around a model released in late June called the Idol 3, which has a 5.5-inch display, dual front-facing speakers and a 13-megapixel camera.
With no term, the phone retails for $349.95 at Bell and Vidéotron, and $360 at Telus. In contrast, with no term, Telus prices a 16-GB iPhone 6 at $840 and a BlackBerry Leap at $360.
In an effort to build brand recognition, Alcatel OneTouch plans to spend five times more on marketing across the continent this year compared to last. Its efforts include recent partnerships with professional soccer team Toronto FC and a popular paint race and festival called The Color Run.
In select Color Run markets, runners can wear bracelets equipped with Alcatel OneTouch-powered RFID tags, a technology that has also been used at music festivals such as Coachella. As participants pass certain stations along the route, cameras snap photos that are automatically uploaded online since users connect the bracelets to their social media accounts. It’s part of the brand’s approach to marketing.
“There are some really wonderful, beautifully built, great industrially designed phones on the market today,” Cistulli said, “but at the end of the day, they just don’t sell.” He doesn’t want his to be among them.