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HTC will return to midrange market to save company's downward slide


News by Andrew Kameka on Monday February 10, 2014.

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HTC today reported its earnings for the fourth quarter of 2013. The company managed to net a small profit ahead of expected losses in the next quarter, but the company has announced a plan to sell cheaper phones as a way to rebound. It may sound like deja vu that HTC is once again talking turnaround, something that it has done for the past two years.

When sales and profits first started to dip from their peak in 2011, HTC announced that it would release fewer phones and focus on the high-end market to raise its profile. HTC quickly back tracked and released several handsets, but it stayed true to that promise in 2013 and focused on the HTC One. That sadly did not reverse the company's fortunes despite near universal critical praise for a phone that never seemed to connect with enough consumers.

Marketing was the culprit for poor sales in 2013, according to HTC CEO Peter Chou and Chairwoman Cher Wang, but HTC will "better communicate" with customers this year. HTC says that it won't try to get into the entry level smartphone market, but it will try to compete in the midrange market. Rather than invest solely in high-end smartphones meant to compete with the likes of the Samsung Galaxy and Apple iPhone series, HTC will create phones meant to compete with devices like the Moto G and a host of smartphones from Chinese rivals. The strategy is that by making money on high volumes of lower costs, HTC can return to profitability and not face so much pressure on a make-or-break high-end device. This will allow the company to still try to chip away at Samsung's lead in the high-end and still make money if it fails. "The two cylinders are going to be fired together," CFO Chialin Chang told Reuters.

source: Reuters

 
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Andrew Kameka
Andrew is based in Miami, Florida.

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