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HTC To Stop Making Budget Android Phones This Year (neowin.net) 40

An anonymous reader shares a report: During HTC's quarterly earnings call for Q4 2016, the company confirmed that it will not be producing new budget Android phones beginning this year. Instead, the company will focus on premium devices, which have a higher profit margin. On revenue of NT $22.2bn, the firm posted an operating loss of NT $3.6bn, and it's been some time since HTC showed a profit. Clearly, it's time to trim some of the fat. And that fat is producing a number of entry-level phones, many of which are nearly identical. For example, the Desire 530, which came to the US in July, had virtually no distinction from the Desire 626, which was introduced a year before.
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HTC To Stop Making Budget Android Phones This Year

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  • Surely any profit margins are good, especially if the budget handsets introduce people to your brand and allows you to spread the risk across a range of models instead of putting all the eggs in one basket.

    I realise that's in theory. HTC have kind of fucked up in recent years and it's less to do with their hardware but how they've marketed them.

    • by AuMatar ( 183847 )

      Profit margins like this are usually calculated by comparing sales price to marginal costs of production. With R&D designing the phones they're likely in the red. Some loss may be ok to prevent competition/provide a brand, but if they're losing enough this makes sense. And I suspect that they are- just way too many players there.

    • A 'brand' is a stamp of quality, so mixing budget and premium products into one brand is generally a bad thing. HP and Dell make a lot of good high-end computers, but also a lot of poor low-end ones, and the bad reputation earned there bleeds over to their premium lines.

      Unless HTC can make their brand stand out, they will be stuck in a race to the bottom with Huawei, Xiaomi, Lenovo, Vivo, Oppo, Oneplus, Elephone, and a million other budget Android products.

      • > A 'brand' is a stamp of quality, so mixing budget and premium products into one brand is generally a bad thing.

        Indeed.

        The problem is that making yourself a premium brand is hard, and expensive. And with Apple and Samsung already in that space, what does HTC have to offer to make themselves noticed?

        I really think this is just the endgame of the market shaking itself out. I suspect that the leaders of today will be the leaders of tomorrow and everyone else will be either niche, low-end, or gone.

        • by Z00L00K ( 682162 )

          I got a HTC M9 last year, but due to the amount of bloatware I would look at something else next time.

          I think that the first thing a phone maker should look at is to not annoy the users with unnecessary stuff and instead let the user decide what they really want. Much like a good restaurant - you will see that when you order a meal there you actually get a few pieces on your plate well prepared. When there's too much stuff you just confuse the user and scare them away.

        • by fred911 ( 83970 )

          Ah.. HTC already manufacturers a premium phone, Pixel. As a brand they devalued themselves years ago with sloppy engineering.

            So, it might be too late for them to market under their brand, but they have no problem manufacturing a quality high-end product.

      • by DrXym ( 126579 )
        Samsung manage it. If you look at the firmware that Samsung puts on the premium devices vs the low end, it's virtually identical. They've managed to increase their reach with a relatively minor additional effort. I suspect Samsung are also pretty glad that they have all those sales to sustain them when they suffer a flop such as their recent battery scandal.
    • I don't think abandoning budget phones is a good idea. Mainly because there is a market for VWs as well as Mercedes. Blu Mobile is doing very well for example.

      It is about marketing. I would say there is a niche for a cellphone maker that cozies up to retailers like Dollar General, Poundland, as well as MVNOs. Phones are getting "good enough" that a flagship phone isn't that much more useful than a midrange or even entry level device. So, instead of trying to dictate terms and be subject to the whims of

      • by Lehk228 ( 705449 )
        they should badge-engineer like the auto makers do. Sell the premium models (more RAM, more storage, faster CPU/GPU, bigger battery) under the HTC name and budget models under a different brand.

        even better if they keep many models on the same form factor so accessories will work between them, like the DTEK50/60 and IDOL4/4s.
        • HTC actually used to do this. The HTC Wizard I had was branded a T-Mobile MDA. It might be a good idea for them to get with retail stores and make house brand phones.

  • ... still make phones? Had no idea.... They suck at marketing their products and it looks like they are going down the drain. Why buy products from a dying company?
  • They need to start manufacturing superior products if they intend to capture the high-end market. Otherwise, all they're doing is eliminating consumer options (in order to keep prices high?). If I'm poor and can't afford the best, latest-and-greatest technology I'm not going to save up until I can afford it, I'm going to find an inexpensive if less desirable product which fills my needs now. Saving up until you can afford what you want has not been the American way for some time now - just ask manufactur
    • What does it mean to make a 'superior' product anymore?

      The low end is built on no margins. They just don't have the economies of scale to compete at the low end; I think that much is clear. You can't compete on price anymore, because the next guy can sell for a penny less, and that may be your entire profit margin. That's not hyperbole--at some point HTC (I'm pretty sure it was HTC) was making an average profit of only 1-2c per phone. Untenable.

      So you need a product differentiator--and what is that? You run

  • I used to have an HTC. It never got any updates after I bought it, and it turned into a horrifically slow mess.

    I now have a Galaxy S5, and before it an S4. The S4 received updates until recently, and the S5 is still getting updates. These are not new phones, but apparently Samsung still bothers to keep their software up-to-date.

    I really don't care how nice the hardware is in any HTC phone; they've shown that they don't care about taking care of customers after the first sale, and that they expect them to

  • by TheFakeTimCook ( 4641057 ) on Friday February 17, 2017 @03:43PM (#53888123)
    Since the vast majority of Android's oft-touted "superior marketshare" numbers is made up of these kinds of shitbox phones, if other OEMs follow suit, you'll soon see the real reason why the Android platform has so many phones in the wild, vs. Apple.
    • by Xenna ( 37238 )

      "you'll soon see the real reason why the Android platform has so many phones in the wild"

      It's about choice. It's about competition. It's about all those things that will make America... (sorry, scratch that)

      There's undoubtedly a lot of crappy Android phones on the market but there's also a lot of great phones among them. My current Moto Play Z is the greatest phone I ever had. Great battery life, SD storage, dual sim and everything works smoothly and reliably. At least as good as any Apple product but plays

      • "you'll soon see the real reason why the Android platform has so many phones in the wild"

        It's about choice. It's about competition. It's about all those things that will make America... (sorry, scratch that)

        There's undoubtedly a lot of crappy Android phones on the market but there's also a lot of great phones among them. My current Moto Play Z is the greatest phone I ever had. Great battery life, SD storage, dual sim and everything works smoothly and reliably. At least as good as any Apple product but plays much better with others.

        Did I mention it's also a lot cheaper?

        How much is your personal identity information worth to you?

        There is a difference between Price and Value. Most people don't understand that.

  • by sanf780 ( 4055211 ) on Friday February 17, 2017 @03:44PM (#53888129)
    When you cannot beat the rest on price, you try on features. And expensive features means higher margins (just slap the PRO moniker).

    It is a pity HTC is late - there are already various players at the high end market too. If you are neither number one or two, then you should bail.

  • "HTC To Begin Charging Premium For Their Budget Android Phones This Year" Their devices just do not have that schick feel, regardless of the tag.
  • by ctilsie242 ( 4841247 ) on Friday February 17, 2017 @04:01PM (#53888247)

    Maybe I am one of the few people who have had very good luck with their phones. My first HTC phone was a HTC Wizard over eleven years ago. It lasted four years, the battery lasted a week on standby, and its dual-core TI OMAP could easily be overclocked. At the time Windows Mobile applications were decent, although it requires a stylus.

    I have bought a few HTC devices, and have been happy with them. All still work, and the only reason I set them aside was for an upgrade. For example, my el cheapo HTC A9 is still going strong, especially with CM/LineageOS.

    The nice thing about HTC is that all their devices are unlockable, bootloader wise. Yes, if you want to SIM unlock, you might have to use the Sunshine S/OFF app, but $25 separating you from an unlocked device... that isn't too bad.

    Feature-wise, I've not found anything HTC devices lack that other brands have. The camera has been decent, the phone responsive, the fingerprint scanner accurate... everyday things are well up to snuff. Since I always use a case for my phones, I'm not as worried about feel.

    From a security point of view, the devices are made in Taiwan, not China, which may not mean much, but it makes the devices feel more trustworthy.

    As for the market, maybe HTC should have another line for budget phones. HTC for the flagship lines, then have a different company or subsidiary to run head to head against Huawei, BLU, and other competitors in that field. HTC can curry favor with the prime telcos in countries, while the lower-end subsidary can focus on getting their devices into the Tescos, Poundlands, Family Dollar, and other stores.

    • by pkphilip ( 6861 )

      Yes, thoroughly reliable phones with a solid build. Still use an "ancient" 526G. What I miss is the fact that they don't do any software updates

  • HTC Sales: [statista.com]
    2010: 24M, 2011: 156M ...2015: 62M
    HTC just unveiled one of the best Android phones of 2016, but you can’t have one [bgr.com] -- The HTC 10 EVO is only available on Sprint.

    Also throughout 2016, there were numerous reports that claimed HTC would stop selling Flagship phones in America completely.

  • The HTC Desire was my first touchscreen smartphone, and for more than a year it was the best device on the planet and way ahead of anything else, including the iPhones of that time. The Flyer Tablet was a seriously impressive device, topping the iPad of the day in every aspect.

    Now roughly 6 years later HTC is barely recognizable. A bloated and jumbled lineup of smartphones with nothing clearly sticking out. I'd cut 80% of the devices offered and focus on building the best smarrtphones available again.

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