HTC looks to low-end phones as panacea for falling sales

Despite returning to a slight profit, HTC continues to struggle amid larger rivals Apple and Samsung Electronics.

AT&T plans to send the latest flavor of Android to the HTC One starting Wednesday.
The HTC One will be joined by lower-end phones this year. Sarah Tew/CNET

HTC is hoping cheaper phones will aid in the company's recovery.

The company, which over the last two years has streamlined its portfolio down to just a handful of premium smartphones, said it would expand its portfolio to include more mid-tier and affordable phones, according to Reuters, citing executive comments from a conference call.

The phones would range between $150 and $300 (excluding subsidies). Its higher end phones retail for around $600, which is standard for a flagship device. The company believes higher volumes of its cheaper device will drive profitability.

The decision to go back into lower end phones marks a reversal of the company's core strategy -- one that has resulted in plunging market share and sales. On Monday, it also reported fourth-quarter revenue had fallen by nearly a third to $1.41 billion, although it managed to reverse a recent trend of losses by eking out a profit of $10 million.

In the first quarter, HTC expects to post revenue of $1.12 billion to $1.19 billion, but return to a loss.

Chairwoman Cher Wang acknowledged on the call that HTC focused too much on its flagship HTC One and its two sister phones, the HTC One Mini and HTC One Max, all considered premium phones with their metal casing and slew of features.

The focus had come when a number of other large handset makers had shifted their gears to mid-range devices and lower. Samsung Electronics already had a healthy and well-rounded smartphone portfolio, while Nokia saw much of its growth come from lower end Windows Phone and Asha devices. Even Apple attempted to break into the mid-tier market with the iPhone 5C.

In a major market like China, companies such as Xiaomi, Huawei, and ZTE all offer low and mid-tier phones.

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About the author

Roger Cheng is the executive editor in charge of breaking news for CNET News. Prior to this, he was on the telecommunications beat and wrote for Dow Jones Newswires and The Wall Street Journal for nearly a decade. He's a devoted Trojan alum and Los Angeles Lakers fan.

 

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