Let’s say your wife is posing for a photo in front of a forest. You take a photo with the next HTC One model smartphone and she’s sharp while the trees blend into the background without each branch competing with her for attention. That example cited by a smartphone analyst in Taipei would best sell HTC’s newest high-end smartphone after its release later this month.
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But the Taiwanese developer hit by more than two years of declining market share and low to no margins in 2013 should focus on cheaper smartphones as the global high-end market saturates under the dominance of iPhones and Galaxys, experts are saying. “The high-end the market is already saturated. It’s not growing,” says Dennis Chan, equity research analyst with Yuanta Securities in Taipei. “Sony, Samsung and Huawei are all trying for the high end. HTC is squeezed out of that segment. It needs to increase low-end and middle-end shipments, but we’re not seeing that yet.”
High after the massive 2014 trade show Mobile World Congress gave its One the best smartphone award, HTC has announced a new model phone due March 25. That pixel of info is more than the 17-year-old company usually lets on before a product launch. It’s a One or One 2 model dubbed the M8 and distinguished by its double-lens camera built for depth of field, analysts are guessing. “People are getting very serious about their smartphone cameras, which are replacing digital cameras,” says Birdy Lu, an HTC analyst with Deutsche Bank in Taipei.
The new release, 4.7 inches high and run on a fast Qualcomm Snapdragon 801, will cost about the same as its rivals at $592 to $693, market forecasters say. But only the camera would set it apart from the competition, which claim their own only-me features. As before, HTC’s model will lack the shine to gain on Apple or Samsung despite strong technology and a wise rethink last year of its marketing. There are just too many handsets for sale.
That problem has eroded HTC’s market share on Gartner’s quarterly hall of fame charts from a historic 10.7% in early 2011 to less than 4.5% last year. After a 6.3% loss in the third quarter of 2013, the company logged a less-than-1% profit in the following three months.
HTC is widely advised to zoom in on sales of cheaper smartphone in China, South Asia and other consumption-intensive, emerging markets with growing demand yet no locked-in leaders. The company called Asia a focus last year as China smartphone sales for all vendors totaled about 90 million units per quarter. The market already makes up 35% of HTC’s global sales. At the end of the third quarter HTC began to push out cheaper Desire-model handsets en masse. Then at Mobile World Congress last month it showed the first of its 2014 Desire series that a news release says “distils elements of the internationally acclaimed design DNA of HTC’s flagship HTC One family.” If that means a piece of high end for the middle end, they’re getting the picture.