& cplSiteName &

HTC Shuns Cheap Phones

Sarah Thomas

12:35 PM -- High Tech Computer Corp. (HTC) (Taiwan: 2498) has no plans to build cheap phones, following a third quarter where smartphone shipments grew 93 percent over the previous year.

HTC sold 13.2 million smartphones in the third quarter, up 9 percent from the previous quarter, and the average selling price of its devices also climbed 0.6 percent to US$344. Most of the growth came from its high-end handsets such as the HTC Sensation and Rhyme. It also had a few entry-level products, such as the HTC Explorer and Wildfire, which helped it grow in emerging markets, but the company said it has no intention of entering the very entry-level market with sub-$100 phones.

"We have no interest in launching any low-priced smartphones because we do not want to make low-quality products," HTC CFO Winston Yung said on the call, refuting local reports to the contrary.

Instead, HTC plans to capitalize on the move from feature phones to smartphones and on dominating the high-end market with Android and Long Term Evolution (LTE). Yung said it will only dip as low as $200 to $250.

The strategy has so far paid off for the company, but there's still ground to be gained in the low end.

Attractive Android handset prices are falling, and a large subscriber base of price-sensitive, first-time buyers are seeking out low-cost phones with smartphone-like experiences. This is a growing market and an important one to target alongside higher ARPU smartphone subscribers. HTC may be short-sighted in ignoring this segment and might do well not to associate low cost with low quality. (See Hope for Nokia's Next Billion and Analyst: Nokia Faces Low-End Threat.)

— Sarah Reedy, Senior Reporter, Light Reading Mobile

(4)  | 
Comment  | 
Print  | 
Related Stories
Newest First  |  Oldest First  |  Threaded View        ADD A COMMENT
12/5/2012 | 4:50:12 PM
re: HTC Shuns Cheap Phones

More evidence from Nokia and The WSJ that the entry-level market is an attractive one to target: http://blogs.wsj.com/digits/2011/10/28/nokias-u-s-plan-target-first-time-smartphone-users/?mod=google_news_blog

Gabriel Brown
Gabriel Brown
12/5/2012 | 4:50:11 PM
re: HTC Shuns Cheap Phones

Maybe hard to make much profit on the low-end? ZTE and Huawei are going to be challenging hard there for long-term share.

Btw, talking of budget Androids, the £90 ZTE Blade I brought from Orange last year is still going. It's a lot of features for the money. It doesn't like going abroad, thou. The networks in France corrupted it and I had to reflash on my return. "Swedish Spring" seems to be the ROM of choice for these budget devices. 

12/5/2012 | 4:50:11 PM
re: HTC Shuns Cheap Phones

I'm sure it is hard(er) to profit on the low-end, especially if you aren't building low-quality phones. But I thought it was weird he implied they'd have to be low-quality handsets if they're gonna be $100. That is the traditional perception of low-cost phones, but - as you pointed out - they are getting so much better, and that's how it should be.

12/5/2012 | 4:50:07 PM
re: HTC Shuns Cheap Phones

I wonder too how much the recent patent battle losses play into this too.  HTC is in some potentially serious trouble with the recent court decisions and how they'll affect the bottom line.  I'm sure it doesn't help the decision making process regarding low-end phones...

More Blogs from Que Sera Sarah
Congratulations to AT&T's Anne Chow, CableLab's Dr. Jennifer Andreoli-Fang and Movandi's Maryam Rofougaran, our 2018 WiC Leading Lights winners.
Heavy hitters in cable, open source and optical networking make up the five women who are shortlisted for the Hedy Lamarr-inspired Female Tech Pioneer of the Year category.
Four worthy women from the worlds of cable, the enterprise, data centers and B/OSS make our shortlist for the year's Most Inspiring Woman in Comms.
Libelium and Movandi and their founders are pioneering new technologies that are already changing the game for IoT and 5G, respectively, making them startups you want to keep an eye on in 2018 and beyond.
Ten worthy women and two trailblazing startups made the shortlist this year for Women in Comms' Leading Lights awards. Winners will be unveiled soon at BCE.
Featured Video
Upcoming Live Events
March 16-18, 2020, Embassy Suites, Denver, Colorado
April 20, 2020, Las Vegas Convention Center
May 18-20, 2020, Irving Convention Center, Dallas, TX
May 18, 2020, Hackberry Creek Country Club, Irving, Texas
September 15-16, 2020, The Westin Westminster, Denver
All Upcoming Live Events
Upcoming Webinars
Webinar Archive