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Can 'Iron Man' star turnaround HTC's fortunes?

Actor Robert Downey (L) Jr.and the comic book character Iron Man ring the opening bell in celebration of 'Iron Man 3' at the New York Stock Exchange on April 30, 2013 in New York City.
Gary Gershoff | WireImage | Getty Images
Actor Robert Downey (L) Jr.and the comic book character Iron Man ring the opening bell in celebration of 'Iron Man 3' at the New York Stock Exchange on April 30, 2013 in New York City.

Don't know what HTC stands for? You are probably not alone.

The struggling Taiwanese smartphone maker of the namesake has launched a $1 billion global ad campaign with a commercial featuring U.S. film celebrity Robert Downey Jr., in the hope of turning around the company's fortunes.

In the two-minute spot, the Hollywood film star, whose record-grossing superhero "Iron Man" films have catapulted him to the top of Forbes' list of the highest paid actors, walks through a series of scenes which play on the acronym, from "humongous tinfoil catamaran" to "hot tea catapult" and "hold this cat."

The quirky ad has left many industry watchers scratching their heads and financial analysts questioning if the expensive campaign can do much to change the fate of HTC.

The company has been struggling to gain market share against tech giants Samsung and Apple at a time when the market for high-end phones is said to be approaching saturation.

A delayed launch of its highly anticipated HTC One smartphone this year has also weighed on the company's prospects. Last month, HTC said it expects revenue to fall as much as 30 percent this quarter to $1.7 to $2 billion, compared to the previous three months, far below analysts' forecasts.

(Read more: Tough times for the 'biggest victim' in smartphone war)

Melissa Chau, senior research manager at IDC Asia Pacific, said that while having a brand ambassador like Downey is a good step for HTC, it's not enough to dramatically change the company's current situation.

"Basically what they need to do is get the phones out there first," Chau told CNBC.

"If you look at, for example, what Blackberry was doing with Alicia Keys, that didn't make a huge difference to their fortunes, either," she added.

The once dominant smartphone maker Blackberry announced this week that it is considering options like putting itself up for sale after failing to gain traction with consumers.

Loo Wee Teck, global head of consumer electronics research at Euromonitor International, said adding "celebrity engagement seems to be the rage now" with technology consumer products, but that's unlikely to increase sales.

"Will.i.am is the director of Creative Innovation and Lady Gaga worked with Polaroid with limited success," Loo said. "Having a celebrity helps to increase HTC's profile...[but] ultimately, it is having a desirable product that helps in generating sales."

(Read more: Facebook can't save HTC as earnings miss: Analyst)

The chatter about HTC's new ad on social media platforms like Twitter, meanwhile, was mixed.

Ben tweeted


While, Waseem Byrne tweeted:


Markroo added:


Downey Jr. was reportedly paid $12 million to take part in the campaign.

Have a look at the ad above and let us know what you think.

For the record, HTC stands for "High Tech Computer."

—By CNBC.com's Rajeshni Naidu-Ghelani; Follow her on Twitter @RajeshniNaidu

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