You may not have heard of TCL or it’s mobile handset brand Alcatel but according to Strategy Analytics, TCL-Alcatel became the sixth biggest mobile phone vendor in the world in the third quarter of 2013. Gartner puts it in eighth place for the same quarter.
TCL-Alcatel's global handset shipments are currently growing six times faster than the overall industry average, says Strategy Analytics
Recently, we’ve seen an impressive wave of smartphones in the Alcatel OneTouch Hero and OneTouch Idol lines. The transition from entry-level to mid-range and beyond is starting to pay off. So, what’s next?
Entry-level to mid-range
TCL-Alcatel’s success in mobile is rooted in delivering low-cost devices. Strategy Analytics suggests that its average selling price for a wholesale handset in Q3 2013 was just $45. Much of the business is still budget smartphones and feature phones, but we can see a rising desire to produce better quality hardware.
The company is focused on a “step-up” product strategy which has seen it start at the budget end of the handset market. Each year it improves the quality of its phones, looking to step up to the next market bracket.
In 2012, Alcatel under-cut the competition with entry-level releases like the Alcatel OneTouch Shockwave with MetroPCS and in 2013, the OneTouch Fierce and OneTouch Evolve were made available with T-Mobile. Last year, at CES, we saw a serious statement of intent with the super-slim OneTouch Idol Ultra, the Scribe phablets, and the Evo 7 tablets.
This year, Alcatel’s mid-range devices the OneTouch Idol and Idol Mini were released with Bell and Virgin Mobile in Canada. It now has the tablet market firmly in its sights with rumors that the POP 7 and POP 8 tablets will be released in North America later this year. TCL-Alcatel wants to challenge the mass market and take on not just Chinese rivals ZTE and Huawei, but LG and Samsung as well. Is it in with a chance?
The Creative Life
The TCL Corporation was founded in 1981 and incorporated in 1985 with Hong Kong-based investors. It initially produced consumer electronics for the domestic market, particularly TVs. It manufactured various firsts for the Chinese market, including the first wireless land-line phone, first 28-inch color TV, and the first laptop with a dual-core processor.
By the time the millennium had arrived, TCL encompassed various companies and business wings, including the TCL Mobile Communication Company established in 1999. It was rapidly expanding its business beyond China and in 2001 the company restructured itself dramatically as it sought to ready itself for global expansion, following it being listed on the Shenzen Stock Exchange in 2004.
Expanding beyond China
The path to international success started with a focus on emerging markets, but TCL felt partners were required to help it break into the European and American markets.
It found allies in Europe towards the end of 2003, announcing a partnership with Thomson, a French company. Thomson did a deal with General Electric to sell TVs under the RCA and GE brands in the States. Starting with an output of 18 million TV sets a year, this partnership set TCL on course to become the biggest TV brand in China by 2012, supplying Samsung, amongst others, along the way.
In 2004 there was another important deal in France, this time with Alcatel-Lucent, to create a mobile phone business. TCL took an initial 55 percent stake, but just a year down the line it bought Alcatel-Lucent out. By 2007 TCL was the sixth largest consumer electronics company in China. It announced that TCL (which had never been explained before) stands for The Creative Life, and there was talk of moving away from the Alcatel brand, though this has yet to transpire.
Alcatel’s assault on mobile
When TCL bought Alcatel out of the mobile phone business it was actually taking a loss, but it soon managed to turn a profit. The initial expansion saw major gains in emerging markets with low-end hardware, particularly in GPRS feature phones.
With a strong presence at the budget end of the market, it has performed particularly well in Central and South America, where it boasted a 13% market share in Q3 2013. Strangely, the company had just a 1% share of the mobile handset market in China, around 5% in Europe, and about 2% in the United States.
TCL-Alcatel's rapid growth now represents a credible threat to mass-market global brands like Samsung, Nokia, ZTE, Huawei, LG, Lenovo and others
Who’s the thinnest of them all?
To give you an idea of the level we’re talking about, the OneTouch Idol Ultra had a 1.2GHz dual-core processor, a 4.7-inch 720p Super AMOLED display, 1GB of RAM, an 8MP camera, and ran Android 4.1 And, while some might decry thin fanaticism, it was a remarkable feat when it was announced at CES, in January 2013. It was also just 6.45mm thick, making it the thinnest in the world at the time. Later, Huawei’s Ascend P6 would take the title at 6.18mm, and, in case you’re wondering, the current slimmest phone in the world is the Vivo X3 at 5.75mm. Vivo is owned by BBK, which also owns Oppo.
Sadly the Ultra never got a U.S. release, but the less impressive One Touch Idol did land for $300 after an Iron Man 3 product placement. The lack of carrier partners probably didn’t do it any favors as interested consumers could only purchase it direct from the website.
Stepping it up again
We like a company that takes CES seriously and TCL-Alcatel really stepped it up this year. We got our hands on the One Touch Idol X+ and there was also the mid-range Pop C9 phablet, and the distinctly low-end Pop 7 and Pop 8 tablets.
The One Touch Idol X+ is packing a 2GHz MediaTek octa-core processor, a 5-inch 1080p display, 16GB or 32GB of storage, a 13.1MP main camera, a 2MP front camera, and a 2,500 mAh rated battery. It runs Android 4.2 out of the box. It’s not vying for the slim crown, but it’s no chubby either, at 7.9mm.
We were further impressed by the somewhat exceptional OneTouch Hero, which manages to fit a disturbingly large display in a very tight form factor, with good specs to boot. Especially when you consider its price point, it gets all the more impressive.
But again, it’s the price point and specs of these devices that appeals to us, and we’re keen to get our hands on more quality devices at ever aggressive price points. Better tech for less money is a win win for everyone, after all.
What do you think a phones like the Idol X+ might cost? At first we heard that it would be “under $350”, but the latest reports are suggesting that the price could even go as low as $250. And you thought the Nexus 5 was cheap. Regarding the OneTouch Hero, it’s likely to be had for a sub $300 price point, which is a strategy we’d like to see larger players in the Android space pursue.
What’s the catch?
The hardware looks absolutely stunning at that price; the main catch is that TCL-Alcatel doesn’t have a lot of strong carrier partnerships. That means you’ll probably have to buy the Idol X+ from the company direct, but at $250 it’s not so much of a stretch.
There was also news at CES this year that the old Idol X and Idol Mini are getting Canadian releases on Virgin Mobile and Bell Mobility, so the company is clearly working on building bridges with carriers. Stateside, we’ve received word that Alcatel will be debuting two devices on two major carriers in the second half of 2014, but that’s unconfirmed for now.
The Idol X+ is already available in China and it is all set for a European release next month, there’s no word on the U.S. and Canada just yet. Could it be the breakthrough device that catapults Alcatel into the public consciousness? Aren’t you just a little tempted at that price? There’s no doubt TCL-Alcatel has a ways to go to compete with the likes of LG and Samsung, but this is an impressive step up to kick off 2014. How good can inexpensive devices get? Impressed with what you see? As always, we welcome and appreciate your thoughts.