IDC Comment: HTC Unveils Two Smartphones Combining the Best of the HTC Desire and HTC One Series
HTC has had a challenging 2013, with the vendor dropping out of the top 5 smartphone vendor ranking in Western Europe. External reasons and internal problems have affected the vendor's performance. External factors and fierce competition have created a more crowded smartphone segment, as all vendors are focusing on the segment. Internally, HTC's flagship phone, the HTC One, was released this year; it won a number of awards, but its launch was delayed due to a camera component shortage in addition to a lack of brand awareness due to modest marketing investments by the company. Yesterday's announcement proves how determined the company is to get back into the game.
The HTC Desire 601 is an LTE, medium-range device featuring a 4.5in. qHD display. The HTC Desire 300 is an entry-level device with a 4.3in. WVGA display and no flash embedded. Both smartphones run on the Android OS, have a 5MP camera embedded, and have the same design language as the HTC One, but featuring plastic materials. The new devices will be available in black and white, but the Desire 601 will also be available in red, changing the black-and-silver culture of HTC's One range. A new color will also be introduced to the range (HTC One and HTC One Mini), with a vivid blue to be offered to select markets from 4Q13. Both Desire series devices will be available in select markets across EMEA from October 2013.
The industry has been very receptive to LTE, which was the fastest-growing network last quarter, according to IDC. Offering an LTE device with a more affordable price point is good for operators, as this will enable them to expand their portfolios to different price points with the goal of selling LTE tariffs to end users. The screen size bands are between 4 and 4.99, which represented more than 50% of shipments in Western Europe last quarter, confirming that these are the right bands to tackle for the medium- and low-end tiers. Continuing with the same design language of the HTC One series is a good strategy, as it was well received by both industry players and end users. Also, connecting the devices to the Desire family, the vendor's best selling and highest-profile range to date, is a smart move.
The remaining question is if the vendor can avoid the challenges it had with the HTC One earlier in the year, when it was affected by shipping delays caused by a camera component shortage. This was due to a possibly too conservative outlook for the One. This time, since the devices are not flagship devices, the chances of the same happening again are unlikely. Another issue is that other vendors such as Samsung, Sony, and even Apple are increasingly focusing on the medium-tier smartphone segment (Apple is expected to launch a cheaper version of the iPhone this month). In the lower end of the market, Nokia and LG continue to expand their portfolios to lower price points. HTC's strategy to expand its portfolio to lower market segments, keeping the same design language and user experience of its premium devices, is a good idea and should also be beneficial for end users, but it faces increasing competition in these segments as well.
The key to these devices' success is going to be how well end users perceive them. HTC needs to effectively communicate the story of the new Desire additions to be able to continue the success of the Desire series.
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