HTC was once the premiere Android device maker — in fact, it made the first handful of Android phones when no one else was interested in Google’s platform. This early support transformed HTC from a white-label electronics manufacturer into a smartphone powerhouse. The last few years haven’t been very kind, though. After lagging sales and a loss of direction, HTC says it’s going to drop the cheap phones from its 2017 lineup.
This bit of news comes by way of HTC’s latest earnings report. In the final quarter of last year, HTC took in NT$22.2 billion ($722 million) and had an operating loss of NT$3.6 billion ($117 million). That’s not good by any means, but in fairness, that is an improvement for HTC. It lost $133 million in Q3 of 2016.
HTC has not released any new devices of note since the HTC 10 failed to catch on in mid-2016. Although, it has been manufacturing the Pixel for Google. That device appears to be selling as fast as HTC can crank them out. However, it carries no HTC branding whatsoever. This is merely a way to keep cash coming in as HTC plans its next move.
That next move is two-fold—HTC is going to be pushing the newly announced U Ultra and U Play hard, and it won’t be dabbling in the entry-level market as it has in recent years. It plans to release 6-7 high-margin smartphones in 2017, and no inexpensive ones. That doesn’t necessarily mean all flagships — just phones that it makes more money on per unit. HTC hopes this course of action will return it to profitability.
HTC’s inexpensive midrange devices in the Desire line (like the Desire 626 above) have been under-performing the budget phones from competitors like Motorola and Samsung. At the same time, the prevalence of monthly payment plans on US carriers has decreased the demand for inexpensive phones as consumers can get flagships for more affordable prices.
The U Ultra is in a strange spot, though. HTC will release it first in Europe with a US release following soon after. It should be available in the coming weeks, but there won’t be any carrier tie-ins. That means HTC’s unlocked variant (priced at $750) will be the only option. That’s a hard sell in the current smartphone market where you can get a Google Pixel or any number of Samsung or LG phones for $30 per month.
HTC might be able to make some headway in early 2017 as the U Ultra will be out before flagship phones from Samsung and LG. This might be the last year HTC can continue making its own branded smartphones without a big turnaround.
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