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September 21, 2017

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HTC shouldn't make wearable device: media

TAIPEI -- A New York Times technology editor has advised HTC Corp. against launching a wearable device because the struggling Taiwanese phone maker needs to focus on developing more cool smartphones instead of trying to break into an unproven market.

Molly Wood, the newspaper's deputy technology editor, said in a blog post on Feb. 10 that HTC is in a precarious position, but with hope on the horizon.

She said HTC's flagship phone, the HTC One, has been "a critical success" and has become a cult favorite among Android phone fans, even with several HTC executives leaving the company at the end of 2013 and the market's doubts about its ability to survive.

"People like an underdog, especially when that underdog makes a cool phone that takes great photos, has a pleasing and unique metal construction, and isn't what everyone else owns," Wood stated in her post.

"But releasing a wearable could be a diversion into an unproven market at a time when focus has never been more crucial," she argued.

HTC Chairwoman Cher Wang was quoted as saying in a Bloomberg News report on Feb. 6 that the company is set to unveil its first wearable device in time for this year's Christmas shopping season after years of development.

Wang suggested in the interview that HTC had overcome battery life and LCD lighting issues that have plagued other smart watch releases.

But consumers have yet to demonstrate that they actually want smart watches as much as the consumer electronics industry thinks they might, regardless of a watch's battery life or its screen's readability, Wood contended.

"HTC is barely alive making smartphones, and now has a chance to rebuild a crumbling brand on the strength of a really good phone," Wood said.

Moreover, HTC should be able to win back its market share if it can keep quality up on its low-priced phones in 2014 to attract budget-conscious buyers, Wood said.

HTC Chief Financial Officer Chang Chia-lin was cited by Reuters on Feb. 10 as saying that HTC will sell more mid-tier and budget products at US$150 to US$300 in both emerging and developed markets.

Whatever initiatives the company is planning, however, it does not expect them to bring immediate bottom line relief.

The Taoyuan-based handset maker has projected consolidated sales of between NT$34 billion (US$1.12 billion) and NT$36 billion for the first quarter of 2014, the lowest in five years, with net loss per share of between NT$2.1 and NT$2.6.

HTC posted its first quarterly loss as a publicly listed company in the third quarter of 2013 and recorded its second straight quarterly operating loss in the October-December period.

British bank Barclays PLC said Tuesday that it would be hard for HTC's planned new flagship model — the HTC M8 — to stand out amid fierce competition in the global high-end smartphone market because the new product will have trouble differentiating itself.

HTC shares had fallen 0.38 percent to NT$129.5 as of 11:09 a.m. Wednesday in Taipei.

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