Iron Man joins China's TCL to challenge Apple smartphones

, Bloomberg

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Robert Downey Jr.
Robert Downey Jr.

To take on Apple Inc. and Samsung Electronics Co. in the global smartphone market, China's TCL Corp. is enlisting a strong 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's 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 in Portland, Oregon, said in an interview. "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.

Brand Awareness

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, according to its website.

"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 in an interview 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 U.S. 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.

Track Record

"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."

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