HTC, the troubled Taiwanese smartphone maker, will continue competing at the high end against companies such as Apple and Samsung, insists its global online communications manager.
The claim from Jeff Gordon came just ahead of the company's launch of its HTC One Max - a revised large-screen version of its HTC One smartphone which like Apple's iPhone 5S adds a fingerprint sensor, though HTC's is placed on the back of the phone, rather than on the front home button, as with the iPhone. The sensor can be used to open three different apps, triggered by different fingers.
The HTC One Max has a 5.9in screen, and is being released in China ahead of the US. That is seen as indicative of the company's attempts to reach a broader market, and a break with the past given that in 2010 HTC was the biggest Android brand in the US.
But it still faces an uphill task in breaking through there, because it has a tiny market share and is competing with Android smartphones in a market which is highly price-sensitive.
Separately, Appledaily, a Taiwanese website, suggested that the company is in talks with China's Lenovo about 'strategic cooperation' after secret meetings in Taiwan during August, and that a deal of some sort could be concluded by the first half of 2014. Lenovo, the world's largest PC seller, also has ambitions in the smartphone market, though it has mostly focussed on its Chinese home market so far.
But there would be political obstacles to a takeover of HTC by a Chinese company, because of the longstanding differences between Taiwan, which has never recognised the mainland Chinese leadership as legitimate.
HTC is likely to need some sort of help if its problems persist. It fell to a NT$3.5bn (£73m) loss in the third quarter, its first loss in more than ten years, as sales dropped by a third to NT$47.05bn (about £1bn), as its smartphone shipments slumped to an estimated 6m - which would give it about 2.3% of the world smartphone business. It faces serious challenges in trying to compete against Apple and Samsung, which have products which dominate the high end of the smartphone business, which is generally splitting towards a high- and low-end market, with minimal business in the middle end between about $300 and $400.
The company was also obliged to put out a clarification on its site after an interview on Bloomberg TV in which its chairwoman, Cher Wang, appeared to say that the company faced 'its most challenging' quarter in the current three months. Wang, the company insisted, was referring to 'living up to the challenge of innovative marketing in Q4 of 2013. She puts direct communications with [the] consumer at the center of [HTC's] overall business strategy.'
Meanwhile Gordon, on Twitter, insisted that 'HTC will not suddenly shift strategy to become a budget smartphone maker.' He added that 'running to [the] low end would be the exact wrong solution' to the company's present problems.
Gordon suggested that Chinese companies which are coming to the wider market are operating at the low-profit end of the market - one into which even Amazon is expected to make a move. 'Competing against Huawei, ZTE, eventually Amazon, etc for [the] low end [on] razor-thin margins is a fool's game,' he said.
Gordon was reacting to the suggestion by Tero Kuittinen, an analyst at Alekstra, that with LG, ZTE and Huawei now shipping more than 12m phones per quarter, 'HTC will face crushing price competition'. Kuittinen suggested that 'It is entirely unrealistic to expect HTC, which has obsessively focused on the $600 price point, to suddenly become competitive at below $150. Its high-end Windows Phones have flopped spectacularly, unable to justify the premium pricing. That leaves HTC nowhere to run.'
HTC has had a tumultuous year, with the departure of a number of executives</a>, the failure of the 'Facebook phone' HTC First, and the arrest in September of a number of former executives from the company, one of whom allegedly had currency equivalent to $260,000 in his car, and is under investigation over whether he took trade secrets stolen from HTC to a Chinese company.
* Just four days after the iPhone 5S went on sale, Germany's Chaos Computer Club spoofed its fingerprint reader.
There is no comment yet for "HTC will stay out of low"
Post a Comment