HTC

HTC to "get out" of "ultra-competitive" entry-level smartphones market, focus on good ol' money-making

by Luis D. / Feb 15, 2017, 3:57 PM

Besides recording the usual less than stellar numbers at its quarterly earnings conference, HTC offered a glimpse at its strategy for competing in the smartphone business this year. Chia-Lin Chang, president of the company's Smartphone and Connected Devices business, asserted that HTC's focus is on returning to profitability after reporting losses for seven consecutive quarters. The approach is to reduce product offerings to a small number of projects with potential for "profitable sales." – this, in president Chang's own words, involves getting out of the entry-level smartphone business, which she describes as "ultra-competitive" and lacking a "profitability perspective."

Indeed, the choice of sub-$150 to $199 phones has become overwhelming, especially in the vast and well-developed Chinese market. Unfortunately, offering a good product is not enough to get noticed, and HTC's marketing and product building power is better spent on a limited number of higher-margin projects. The company has no intention of presenting more than 7 "key SKU" (stock-keeping units) this year, so let's hope it will be a lucky seven!

In addition to new entries in the HTC U smartphone series, the company is preparing Vive-branded products such as wearable fitness tracker that doubles as a VR controller.

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source: HTC via HTC Source

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75 Comments

1. Duncdawg26

Posts: 170; Member since: Jan 20, 2017

Whatever they make is a rip off. The U phones are a joke for their prices, as are any other phone they've produced. The 10 was the closest thing to an accurately priced phone and most other flagships were still better by the sound of the reports I've read...

posted on Feb 15, 2017, 4:03 PM 11

3. AllFanboysMatter

Posts: 206; Member since: Feb 14, 2016

Here's the sad reality - HTC is TRASH Let's all think about this for a second. As the Company is slowly losing all of its cash, the best thing they have come out with during a time facing bankruptcy is HTC U. No one knows what the U stands for, but I'm going to say it stands for UNIMPRESSIVE. HTC is struggling not because it's competing in the low-mid range space; HTC is struggling because they fail to innovate and come out with exciting products, which they did in the past. You guys remember HTC's first phones? They were full of energy and excitement. They were different for good reason. HTC is now committing the fatal flaw of the mobile industry by failing to differentiate its mobile offerings. Stuck in a time era in which we see nothing but hundreds of Chinese competitive pricing and thousands upon thousands of devices, HTC took the liberty of making products from a similar tree with slight originality and hoping something sticks. HTC - We are NOT playing darts. You guys are failing to capture some of the foundational characteristics you originally came to market with. Design! The new HTC looks like some BLUE BALLS. The new HTC U looks like it came straight off a blueberry tree that is facing a serious illness! How the hell can a company come up with such a hideous, unattractive design? It's unfathomable how ugly and distasteful the thing is. Design is where they failed first, but specs are where they failed second. There is nothing interesting about the phone on the spec sheet, so from the very start, all enthusiasts of HTC are again bored. HTC - this is a huge problem. You can rely on people like us to spread the word, giving your incredibly low marketing budget. But we can't even advocate for this piece of absolute trash you're throwing at us. Why even put them in retail stores? You guys need to take these "new" phones and take them straight to the DUMP because we all know that's where they will all be in 6 months MAX. HTC - it's time to go back to your roots and make those intersting products that everyone once wanted. I consider HTC as the first company to make a valid substitute to the iPHone, which says a lot of the power they held on consumers. think about it...going against all those heavywaits, HTC was once regarded as the top 2 smartphone maker in the world, only to fail to the likes of Samsung, LG and various other android competitors. Just like Trump says - "lets make america great again" HTC this is your new slogan is "Lets figure out why we make smartphones again". Are you guys running out of ideas? if so, please consult some of the various teams at phonearena, verge, or some consulting service because it's as if you guys are repeatedly getting stabbed in the neck with a knife but acting as if you enjoy it. You guys are slowing dying because you are choosing to do nothing to better your situation.

posted on Feb 15, 2017, 4:17 PM 7

4. AllFanboysMatter

Posts: 206; Member since: Feb 14, 2016

To add, IT'S COMPLETELY MADDENING THESE GUYS REFUSE TO TRY! You guys need to follow these simple steps before facing insolvency: 1. Fire your CEO 2. Make a phone between 5.2-5.5 inches 3. Give it 4000mah+ battery life 4. Make a very sexy aluminum design 5. Give it that snap 835, or buy a Exynos or Kirin 6. GET IT DONE You guys have all the tools necessary to make a comeback, but you aren't going to do this by sitting on your butts eating donuts and getting fat. Just like I tell some of my clients since I'm a personal trainer, you aren't going to lose weight when you are constantly doing the same thing. You wake up, eat thousands of cherrios, you eat pizza, get 18 large fries, and then have the nerve to get 20 diet cokes?!?!?! That's what HTC is doing. They are refusing to change their bad operating habits, which stem at the product level. They need a better product, then better procedure of actually marketing the product. Success comes to those who work hard. But HTC right now is just eating cake.

posted on Feb 15, 2017, 4:24 PM 9

75. nebula

Posts: 1009; Member since: Feb 20, 2015

Indeed , they are i need of cash. I am surprised they can still be going and running, limping would be appropriate word. Did you know that they core design team also fell apart? On the other hand cash, alone, in my opinion is not enough, there has to be heart, ideas and love to create the smartphone and run business successfuly, true philosophy behind but the imitation of it in my honest opinion. So yes the only possible outcome to start with would be buy out :) Cheers :)

posted on Feb 17, 2017, 12:18 PM 0

5. AllFanboysMatter

Posts: 206; Member since: Feb 14, 2016

*heavyweights oops lol

posted on Feb 15, 2017, 4:27 PM 1

24. BlackhawkFlys

Posts: 908; Member since: May 07, 2014

I personally like the looks of the new HTC phones but they do not deserve the price they are asking for it.

posted on Feb 15, 2017, 5:41 PM 1

26. kiko007

Posts: 7493; Member since: Feb 17, 2016

Depends on which phones. The 10 was absolutely worth its price tag imo, but the Bolt? Hell no. The U? Definitely not. The U Ultra? Meh. Weird how their pricing is all over the map right now.

posted on Feb 15, 2017, 5:52 PM 2

56. ebilcake

Posts: 1227; Member since: Jul 16, 2016

You can't be serious, the HTC 10 was massively overpriced and still is. It's a nice phone but when you compare features to other flagship devices it falls short.

posted on Feb 16, 2017, 6:08 AM 1

46. Izzat

Posts: 12; Member since: May 16, 2012

i do believe not just HTC but the rest of android smartphone maker in general have lose a lot of what make buying a new smartphone exiting ever since all of them have gone with the all metal body design that are pretty much the same as the rest of them. Everyone of them are boring and as exiting as a piece of expensive steel bar. I can give out an example such as sony ericsson to some extend the early years of sony smartphones tend to released phones that are unique to one another, we get the beautiful design of the xperia ray and the quirky xperia active. HTC on the other hand release the EVO line which is just awesome but my personal favorite is the ONE S and the M7 ane dont get me started on the Nokia lumia devise prior to the burning platform memo.

posted on Feb 15, 2017, 7:47 PM 0

67. LionStone

Posts: 1048; Member since: Dec 10, 2010

TLDR... Keep crying but I'm still unimpressed with your drivel.

posted on Feb 16, 2017, 9:22 AM 0

74. nebula

Posts: 1009; Member since: Feb 20, 2015

Dude , I enjoy reading you and agree most with what you say. If to add I would say the core problem is HTC executive management that truly have no idea how much they deviated from famous and unbeatable M7 , like someone said they went only downhill after M7. Something that was a pinnacle of smartphone arena to a gradual brain anaesthesia up in the HTC quarters. There is total , complete and consistent mess. U series is a f**king catastrophe from design point of view to the whole philosophy in general ,a phone without a character whatsoever. Galaxy S4 clone in rectangular incarnation. They are dead as smartphone company, there will be no come back even in the brightest fantasies. I still hope but my clear mind suggests it's not going to happen. And I will wait for one of those videos on the coldfussion channel on youtube about " the and fall of HTC smartphone businesses ".

posted on Feb 17, 2017, 12:15 PM 0

2. Arch_Fiend

Posts: 3951; Member since: Oct 03, 2015

The only way HTC could come back to life if for them to release a smartphone with everything.

posted on Feb 15, 2017, 4:14 PM 0

11. Subie

Posts: 2354; Member since: Aug 01, 2015

And sell it for less then the competition. Not price it higher like they did with the HTC 10.

posted on Feb 15, 2017, 5:03 PM 4

27. Arch_Fiend

Posts: 3951; Member since: Oct 03, 2015

Exactly for HTC $499 would be their sweet spot, I'd pay that for a flagship that had everything and a qhd oled screen between 5.2-5.5in, preferably 5.5in. Oh and they must move the FP to the back.

posted on Feb 15, 2017, 5:52 PM 2

31. Subie

Posts: 2354; Member since: Aug 01, 2015

I 100% agree with everything you just said. I think in Canadian dollars though ;)

posted on Feb 15, 2017, 6:04 PM 1

29. TerryTerius unregistered

I really wonder why everyone thinks that will work. Nearly all of the companies that try that strategy are selling a decent amount of phones, but they aren't really making a ton of money. At least not off their hardware. Look at Huawei, for example.

posted on Feb 15, 2017, 6:01 PM 0

32. Subie

Posts: 2354; Member since: Aug 01, 2015

Last year the HTC 10 sold for $1,000 CAD (32gb model). iPhone 6s $900, Galaxy S7 $900, and the Google Pixel $900. Selling for more then the competition was a fail. And now they need to fight to get their brand recognition back...

posted on Feb 15, 2017, 6:08 PM 1

34. kiko007

Posts: 7493; Member since: Feb 17, 2016

They sold more phones and made less profit than the year previously correct? Really strange turn of events indeed. As to why people seem to believe dropping a hundred dollars off the price will be of benefit, that's just human nature regarding low level economics. I imagine the majority of people think that lowering the price will bring in more customers, which is in fact false in most instances. HTC's products simply aren't of value to the general public, regardless of how much they may cost.

posted on Feb 15, 2017, 6:19 PM 1

37. Arch_Fiend

Posts: 3951; Member since: Oct 03, 2015

The HTC 10 would have sold more had it been $100 less than what HTC was asking and that is a fact. The 10 had tons of ppl interested in it but a majority of ppl lost that interest after seeing the price, I was one of them and I can honestly say that had it been $100 cheaper I would have bough an HTC 10, I still almost bought one TBH.

posted on Feb 15, 2017, 6:32 PM 2

39. kiko007

Posts: 7493; Member since: Feb 17, 2016

I get what you're saying, but it's not that simple. If that were the case, each sale on HTC's website would have seen substantial increases in sales and/or traffic, which didn't happen considering HTC missed their targeted number of sold handsets. Price is only a factor in purchasing decisions if people want what's offered.

posted on Feb 15, 2017, 6:41 PM 0

41. TerryTerius unregistered

People seriously underestimate the power of branding. You can have two products sitting right next to each other with identical features and people are far more likely to choose the brand they have heard of before, or have personal experience with. Reason is pretty simple. People are risk averse and tend to trust common agreement and previous experience more than the potential benefit of award for trying the unknown.

posted on Feb 15, 2017, 6:48 PM 1

42. kiko007

Posts: 7493; Member since: Feb 17, 2016

Exactly. People question the quality of items from non-reputable brands to protect themselves from potential issues down the line. There's a reason the line "You get what you pay for" is a staple of retail in general.

posted on Feb 15, 2017, 7:01 PM 0

49. Arch_Fiend

Posts: 3951; Member since: Oct 03, 2015

Of course isn't not that simple, I know lowering the price wouldn't have made a difference, it's a combination of things that HTC just can't seem to get right anymore and one of those things is price and it's a big one.

posted on Feb 15, 2017, 11:19 PM 0

40. TerryTerius unregistered

I don't mean to be rude, but that is an assumption. And even if they had sold more phones, there is no guarantee whatsoever it would've made them more money. That is the point. It's a fallacious assumption that selling more units automatically means you make more money. If you sell 200 pens at $10 a pop, and I sell 50 pens at $200 a pop, I made more money than you. A lot more. And that is assuming that our costs are equal for bringing a product to market.

posted on Feb 15, 2017, 6:44 PM 0

50. Arch_Fiend

Posts: 3951; Member since: Oct 03, 2015

Wooo slow down man, I never said they should sell phones for dirt cheap lol. Because $10 and $200 is a much bigger price difference than say $900 and a $1000. I wouldn't sell mine for $10 in this scenario, I would sell them for $190.

posted on Feb 15, 2017, 11:23 PM 1

52. TerryTerius unregistered

It was an exaggeration, but you got my point. Phone Arena put an article out awhile ago describing how much money manufacturers were actually making per unit. I don't remember the exact numbers, but the margins were relatively slim. $100 might not sound like much, but that can be the difference between making a profit or barely breaking even. HTC made the decision to stop playing the low-cost flagship Game for likely the same reasons Sony did. It just isn't profitable. At the end of the day, they can sell fewer units but make more money if they stick with devices that have healthier profit margin's.

posted on Feb 16, 2017, 1:28 AM 0

54. raky_b

Posts: 384; Member since: Jul 02, 2014

No, they would not make mpre money from selling more devices with lower prices, that's a fact. But, there is another thing... Brand recognition. Yes, some of you here is writing that if you selling more expensive products your brand is valued higher, but that's not completely true... Since, we are talking about brand that had it best days and now is falling down. So, solution could be to lower prices, compared to competitors and try to grab market share, not make bigger profit in year or two, just to prove people that they still can do it right. Case is : if you have same priced devices from Samsung and HTC, 90% will take Samsung. That is the fact based on sale numbers. So, your competition has a greater value and better brand recognition (not necessarily better devices)... And it's a sign you need to do something about it. Today, only big fand of HTC will buy their device... No one else. And they can't get new "fans" if they don't offer something to those who are looking for a good deals. Average buyer will think :" for a lot of money i will buy Samsung or Apple" - there is no HTC there anymore. So they should decide, will they be satisfied with total of f. e. 1 million of total sold devices wit high price, and "make some profit on it" or fight for a matket share, like Chinese manufacturers do. They have that privilege that thir brand HTC still means something, so they don't have to go that love with profit margins like xiaomi or OP,(whose by the way are both making money), and they still can get some fine profits buy lowering prices compared to Samsung....like, selling flagship device fir 600$...And people would see it like good deals from recognized brand, and buy it before some Chinese, even though it is more expensive.

posted on Feb 16, 2017, 2:56 AM 2

57. ebilcake

Posts: 1227; Member since: Jul 16, 2016

You do talk a lot of nonsense kiko007, you know that right?

posted on Feb 16, 2017, 6:17 AM 0

60. kiko007

Posts: 7493; Member since: Feb 17, 2016

Dude, I have several degrees in both business AND Psychology, I know what I'm talking about. It may be hard to accept, but price isn't everything. If that were so, no one would buy Android flagships at all considering the price effectiveness of the purchase is value suicide.

posted on Feb 16, 2017, 7:53 AM 1

65. ebilcake

Posts: 1227; Member since: Jul 16, 2016

I don't care about your qualifications, I know plenty of people who have impressive CV's but lack common sense. Fact - if the HTC 10 was priced £150 lower in launch I would have bought one, it's a good phone but difficult to justify at the launch price and even current pricing, as such I wouldn't recommend it to anyone, all because of price! They were charging us £570 on launch here in the UK, it was a total rip off.

posted on Feb 16, 2017, 8:52 AM 0

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