Chastened HTC turns to cheaper smartphones in search for profit
(Reuters) - Smarting from growing losses, Taiwanese phone maker HTC Corp says it will expand its range of cheaper products as it fixes off-target marketing for its premium smartphones. — The company that has long prided itself …
Context & Ripple Effects
This is a full reversal of the strategy HTC staked out two years ago: in early 2012 it announced it would give up on quantity and try quality, then by mid-2012 was explicitly resisting the push toward low-end phones to protect its premium margins.
What changed is the P&L. As the same-day pickups from The Verge, CNET, Ars Technica and others note, HTC broke even in the final months of 2013 but forecast a losing start to the new year — with confirmed losses growing and management admitting its premium-smartphone marketing missed its targets, the quality-only bet is being abandoned from below.
First-order effects
- HTC's product roadmap widens downward: cheaper devices join the range alongside the premium flagships, while off-target marketing for the top tier gets reworked — an admission that the brand's message never reached the buyers it priced for.
Second-order effects
- A premium-branded vendor re-entering the mid-range puts direct price pressure on the volume Android makers already fighting there, and squeezes HTC's own carrier and retail partners who now carry a wider, lower-priced SKU set.
Third-order effects
- If the pattern holds, the smartphone market consolidates into a barbell — Apple-style premium and commodity volume at the ends — leaving brands without either scale or ecosystem stranded in the middle, where HTC now finds itself after abandoning its own quality-first doctrine.
The trend: Smartphone value is migrating to the ends of the price spectrum, forcing once-premium Android brands to chase mid-range volume to stay profitable.