Things are looking worse and worse for HTC, with their revenues continuing to decline, and actually losing money starting with the previous quarter. This may force HTC’s hand to do something they should’ve done a long time ago – focus on low-end devices (think sub-$150 off-contract) to gain market share, and mind share. It seems they are looking into doing that soon:
“We’re looking at broader products in this quarter…we aim for higher volume into 2014 that will give better profitability,” said the company financial chief Chialin Chang.
HTC has never really been a company to make low-end devices, or at least not under their own name (they used to make devices for other companies or carriers in their early days, but not under their own brand name). Since they adopted Android they’ve mainly focused on flagship devices, while releasing some mid-range phones, too, to have a broader offering, but those weren’t advertised as much.
I think that was a mistake, because while low-end devices may not have room for a lot of profit, for each unit, they could end up making them a lot of money if the volume is high enough, and that’s what HTC wants to target in 2014 – higher volume devices. This could get them higher market share, which just means more people will be using HTC devices, and more people will be hearing from their friends that they have an HTC device, which in turn gives them a reason to seriously consider buying one for themselves the next time they want a phone.
These low-end devices, can also be sold for lower prices off-contract in Europe, Latin America, Asia, and even Africa, and if HTC could find moderate success in these markets, they could be doing very well, even if they aren’t making a lot of money in US anymore, because they get squeezed by Apple and Samsung too much there.
Now that KitKat has just come out, and it specifically optimized for such low-end devices, it’s the perfect opportunity for HTC to start focusing on these low-end markets, and offer phones that are competitive on price, performance, build quality, and design.