HTC tries to reverse its fortunes with a cheap, China-focused smartphone
Can a plastic smartphone change HTC's fortunes? That's what the company is hoping to find out with its newest product, a plastic-bodied version of its flagship HTC One M8 smartphone that will debut in China before launching around the world later this year. The device -- called the HTC One E8, for some strange reason -- will cost half as much as its metallic predecessor.
The E8 checks all the right boxes. It's cheap. It will debut in China, which is fast becoming the center of the smartphone industry. It will be available in a variety of colors, which seems to be a requirement for low-end smartphones. (For proof, just look at the iPhone 5c, Nokia's Asha smartphone line, and countless other cheap mobile devices.) It's an analyst's wet dream.
HTC could use one of those. The company today released its monthly financial report, and it has seen a 27 percent year-over-year decline in revenues -- a change from March and April, when it actually made more money than it did in the same months last year and seemed to be reversing its recent stumbles. Now it seems that those months might have been exceptions to HTC's money losing rule.
Now the question is whether or not HTC's latest smartphones can reverse this trend. The HTC One couldn't, even though it was seen as one of the best Android smartphones available at launch. The HTC First -- which should have been called the HTC Only, since it was the only device with Facebook Home pre-installed -- was a total, unmitigated disaster. Each of HTC's prior "saviors" have been anything but.
Maybe this plastic wunderkind will be different. At least it shows that HTC can do what Apple couldn't by releasing a low-end product at a reasonable price. Apple's iPhone 5c was criticized for being pitched as a cheap smartphone even though it costs almost as much as its high-end counterpart. That might not be enough to restore HTC to its former glory, but it might provide some comfort as Apple's ascent matches HTC's descent.
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AnandTech thinks that the HTC One E8 is a no-brainer:
HTC is emphasizing that this phone retains the hardware that makes up the One (M8) while moving it to a lower, more competitive price point for those that don’t care for the metal unibody. This may prove to be an effective strategy, as it would offer a great value for the money in places where the One (M8) is priced around the same as the Galaxy S5 and other high end flagships, and bring price parity to areas where the One (M8) is priced above most flagships.TechCrunch chronicles HTC's financial woes and explains why the company should've held onto its stake in Beats, the headphone maker Apple acquired for $3 billion in May:
The May decline is another unwelcome sign for the company which has been battling to turn its fortunes around in recent years in the fiercely competitive Android smartphone space, with a run of declining quarters culminating in its first ever quarterly loss in Q3 2013.
HTC then narrowly avoided another loss the following quarter — owing to a one-off windfall from selling its stake in Beats, before dipping back into the red again in Q1 this year. (Had HTC held on to its Beats’ stake a little longer, of course, it might well have won a much larger windfall.) Quartz explores the iPhone 5c's problems and, in effect, makes a compelling case for the E8:
What people want is not the cheapest iPhone available, but the one that offers the best value for money —which for now is the 4s. Now that Apple has evidence that customers in emerging markets will buy iPhones — and not just the cheapest one around — perhaps it is time to revisit the idea of new, less-expensive model (unlike the much-touted “cheap” iPhone 5c, which turned out to actually be pretty pricey). That way, emerging market customers will have a new iPhone to buy that actually makes sense, instead of shelling out for a three-year-old model.Pando weighs in
The HTC One is an exciting device. It’s one of the few Android devices that screams “premium” and eschews plastic for aluminum. It’s got an ultra-high-resolution display, promises a great camera, and represents a leap forward for HTC, which is struggling to stay afloat in a smartphone market dominated by Apple and Samsung.
None of that changes the fact that anyone reading its feature list or talking to a salesman will have to stifle laughter at every turn. HTC took a proud device and saddled it with juvenile names, and now what should be a flagship Android device is quite literally a laughing stock. On Apple's trouble penetrating the Chinese smartphone market:
Who loses as China gets bigger? Mostly just Apple. The company has notoriously struggled with traction in the huge country because there’s more app options on Android for Chinese users, and the iPhone prices are too high for the typical Chinese consumer. The Apple 5c was rumored to be the company’s big play for the price-conscious Chinese buyers. But as we all know, that launch went over like a dud, with the $600 – $700 starting price tag still not enticing enough to attract the low end of the market. At this point, Apple is the 5th biggest smartphone provider in the country, with only 7 percent of the market share.On the similarities between HTC and Hoy Fung, the company behind Sriracha:
On the surface, HTC and Tran face very different problems. HTC’s products are less popular than they were before; Sriracha is becoming more popular every year. HTC failed to effectively advertise its products and in turn ceded more of the smartphone market to Samsung; Tran says that he can’t advertise Sriracha because he wouldn’t be able to meet demand. HTC is working with metal and glass and silicon to make electronics; Tran is working with peppers and spices and garlic to make hot sauce.
But underneath all that, it seems that HTC and Tran have more in common than you might think. Both are focused on making the best product and making sure it gets to people who want it without worrying about competing with other, larger companies. Both have their fervent admirers and their dismissive nay-sayers. And both are trying to stay true to their original mission despite constant pressure from other businesses, customers, and pundits.