HTC ‘can’t work on one thing forever’

Author

Matthew Sparkes

October 9, 2014

With its smartphone market share plummeting and no other income to fall back on, HTC is launching a camera and a photography social network, chief executive Peter Chou tells Matthew Sparkes

HTC’s co-founder Peter Chou has seen his company’s share price rocket upwards as its products grabbed a huge share of the smartphone market – and then quickly plummet back to Earth as Samsung, Sony and others weighed in behind Apple and Microsoft.

The problem was simply that prices were too high and the products too narrow in focus, he tells me in New York ahead of the launch of the RE camera and HTC Desire EYE smartphone.

The new camera, and a social network for sharing images and videos to go along with it, are the proposed solution to the problem of a lack of diversity, and a planned bulking-up of the mid-range phone line-up aims to take care of the problem of high prices.

“This year we’re actually strengthening our mid-range Desire product line. Our Desire line is doing well in emerging markets. It’s even starting to get very positive momentum in Western Europe, the Middle East and here in the US,” he said, adding that upcoming products would be “very, very competitive” on price.

“That’s how HTC this year want to break through,” he said, predicting that HTC’s smartphone market share would grow next year. It’s not a hugely ambitious statement, even if it’s far from guaranteed to be achieved: this summer analysts put the figure at around two per cent.

HTC has also decided that it needs to make money from those people who’ve decided to plump for an iPhone or Galaxy handset. The RE camera, for instance, will be supported with iOS and Android apps, so anyone is a potential customer.

The camera is an interesting product, but how many will they sell? “We only need to worry about whether we can make enough,” a confident Chou replies.

The accompanying cloud-based social network called Zoe, which the camera – and any phone – will be able to upload photos and videos to, is similarly open. It’s interesting, and has some inventive features such as automatically-generated clips of trips or events created from lots of small videos and photos. But quite how many people it will lure away from Facebook, Instagram or Vine is unclear.

Nonetheless, HTC’s future must be diverse. Relying on smartphones alone is too risky, particularly when they’re being beaten in the market by Samsung, Huawei and Apple.

“We have to keep working on new value, new innovations. We can’t be just working on one thing forever,” said Chou.

After the RE camera there will be more standalone devices, he promises. Does that mean smart watches and fitness trackers, I ask. “No comment.” There will be more announcements “next year”. He is similarly tight-lipped on the prospects for the rumoured new HTC tablets.

But these new devices are needed to generate income, and also to act as a form of product marketing for the company’s phones. Lure them into buying a camera and sell them a matching phone at their next contract upgrade is the plan.

“We have to keep working on the addition of value. HTC is a young brand. This market is very very competitive, that’s true. What we have to do is to make sure we have the best design, the best experience… so it actually stands out,” said Chou.

“At the same, we’re time creating this iconic and innovative product category to make sure people know the HTC experience more.

“The RE camera it will work for all smartphones, including the iPhone. This is a new milestone for HTC, a new approach. Using all of our knowledge, all we know about design, and creating new categories, from a pure smartphone company.”

It’s a strategy which seemingly every electronics manufacturer is already some way down the road on: Samsung has its watches, as well as a huge range of home entertainment devices, Apple has its Watch, iPad and desktop and laptop computers. HTC, which was founded only in 2007, is now realising that it has the expertise – and a pressing need – to develop a range of devices.

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