Sometimes, it seems, having a good smartphone just isn’t good enough. HTC said Monday that it will return its focus to the low end of the smartphone market, adding to evidence that all is not well in the premium smartphone market.
For consumers looking at buying smartphones in the next year or so, that likely means more plastic-backed phones at lower prices of around $150 to $200, rather than the $600 price tag of the company’s flagship HTC One.
The move adds more weight to the warnings that have come from Apple and Samsung that the market for high-end, high-profit smartphones is due for a slowdown as the main markets for expensive smartphones hit their saturation point.
It’s a telling reversal from HTC, which said two years ago that it would shift from making a broad range of phones with a wide range of prices to focusing on fewer, higher-quality products. That strategy has failed the company, which indicated last year that it would broaden that focus to mid-tier phones as well.
The effort produced the strong HTC One line — well-reviewed smartphones that never managed to get the sales that they needed to compete with Apple and Samsung. According to the analysis firm IDC, HTC was not even in the top five mobile phone vendors for 2013; it lagged not only behind Samsung and Apple, but also Huawei, LG and Lenovo.
HTC reported a small profit of $10 million in the last quarter of 2013, but even that missed analyst expectations of about $12 billion. In a statement, HTC chief executive Peter Chou said that the company hopes to recover some of its fortunes with a focus on making a “compelling mid-range portfolio” and by improving communications with its customers.
The low-end of the smartphone market is where analysts project the greatest growth will be in the coming years. If HTC can duplicate the early success it had with making Android phones for the U.S. in Asia and Eastern Europe, for example, the strategy may help its flagging sales. But it’s also going to be tough for the company to play in, however, especially as two of the firms that pushed it out of the world’s top five are ones intensely focused on making cheap smartphones: Huawei and Lenovo, which recently agreed to buy Motorola Mobility from Google in its own effort to ramp up smartphone production.
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