Amid falling revenue and minuscule profits, HTC announced that it will focus on low-end smartphones in hopes of boosting profits. The company plans to balance its low-end offerings with a strong flagship--the HTC One 2 a.k.a the HTC M8.
Last year, HTC announced its first quarterly loss. Since then, the company has been struggling to recoup its losses. HTC announced that it made $10 million in profit during the fourth quarter of 2013, but saw a huge drop in revenue to NT$42.9 billion ($1.42 billion US), from the NT$60 billion the company reported a year ago.
HTC may have avoided another quarterly loss, but it hasn't solved its problems by any means. The company's current flagship, the HTC One, has failed to bring in the record-breaking sales that Samsung and Apple regularly report. Increased competition from growing rivals in China such as Xiaomi and Oppo has also thrown a wrench into HTC's plans to improve its situation. In a market filled with excellent high-end smartphones, HTC has simply lost its appeal.
In spite of indications that HTC won't be able to turn its fortunes around, the company remains optimistic. In fact, HTC has a whole new game plan. In addition to the much-rumored HTC One 2 flaghsip, the company is planning to release a series of low-end smartphones. In focusing on the low-end portion of the smartphone market, HTC believes that it can decrease spending and increase profits, while simultaneously wooing lost customers back to the HTC brand.
"The problem with us last year was we only concentrated on our flagship. We missed a huge chunk of the mid-tier market," co-founder and Chairwoman Cher Wang told Reuters in a phone interview.
Chialin Chang, HTC's Chief Financial Officer added that although HTC won't enter the "very, very low-end market," it will center its offerings in the mid-to-low-end of the spectrum. The majority of HTC's smartphones will cost between $300 and $150 without subsidies, but the company still plans to release a $600 flagship smartphone.
"The two cylinders are going to be fired together," Chang said.
HTC's executive believe that if HTC can tap into the very large mid-to-low-end smartphone market, the company will finally be able to report reliable profit and end losses.
"Overall profitability is going to grow," said Wang.
HTC vehemently denied that the the company would regress to its original state as a contract manufacturer supplying phones to other companies.
"We're not even considering that," Wang said.
What remains to be seen is whether HTC's gamble pays off or not.
