Subscribe / Unsubscribe Enewsletters | Login | Register

Pencil Banner

HTC 10 is a 'spot on' smartphone that won't save HTC

Matt Hamblen | April 13, 2016
Unless its Vive VR device does well, HTC is 'doomed,' says one analyst.

"Right now, it's a very saturated market and there's no special thing coming up, so manufacturers are resting on their laurels," Stofega added.

Smartphone saturation and longer time to upgrade

While high-end Android smartphones face competitive problems, there is a general recognition -- even with Apple -- that customers in the U.S., as well as other places, are slow to upgrade to new phones.

"Even Apple has to take stock of what's happening in the U.S. and other saturated markets," Stofega said. "You need more than faster speeds and something that's incredibly different, which is not an easy thing to do."

At a recent conference, Stofega said he heard that LTE phones will sell well in Africa in the next year, "but even they don't make up the volumes needed."

Overall, there is smartphone growth, albeit slower than in recent years, so smartphone makers are not about to walk away. But U.S. sales in the last quarter of 2015 were down 6%.

At Mobile World Congress in late February, LG Electronics officials were especially candid about the need to find new strategies to sell smartphones. Two years ago, LG said it knew there would be a plateau in smartphone popularity so it launched the G5 smartphone with a modular design, and heavily marketed the phone in the U.S.

Even Apple is feeling the impact of customers' putting off smartphone upgrades more often than they once did. Brokerage firm BTIG last week cut its estimates for iPhone sales through 2017, based on long upgrade cycles, and indicated that structural changes are underway for the market.

"Upgrade rates [for all smartphones] were lower than we expected in the fourth quarter and driving even lower in the March quarter," wrote BTIG analyst Walter Piecyk.

Marketing matters — a lot

Unlike Samsung and LG, and certainly Apple, HTC is not expected to launch a major marketing campaign with its new HTC 10.

"HTC still has some of the best designs out there today, but they don't have the necessary marketing budget to go out there and push and don't spend — or can't spend," Stofega said. "I've always been a fan of their designs. They have always been spot on."

Carolina Milanesi, an analyst at Creative Strategies, added that the HTC 10 is "good-looking, but it's not the only one that is." She said its primary market will be loyal HTC fans who are upgrading from an HTC M7 or M8.

Before 2012, HTC was considered a smartphone market leader, but "the market grew up so quickly around it that new competitors were able to quickly gain scale," said TBR's Narcotta. "HTC misfired when it mattered most by changing its strategy [to lower-priced devices] when Samsung and Apple were competing in the premium space, only to change it back again when Samsung's smartphone business began to slow down."


Previous Page  1  2  3  Next Page 

Sign up for Computerworld eNewsletters.