It Would Be a Shame if HTC Gave Up on High End Smartphones

My first smartphone was a T-Mobile G1, otherwise known as the HTC Dream. Not only was it my first, but it was also the introductory Android phone. It didn't take long for better and faster Android devices to come out, many of which were built by HTC. If you followed the tech scene back then, you would have seen stories about HTC posting record quarters with sizable profits. Those days are long gone.

Fast forward to today and HTC, like just about every other smartphone player, is struggling to carve out a profit competing against Apple and Samsung, the two behemoths that rule the mobile world. Instead of reading about record quarters, HTC's financial reports are rather depressing these days. Looking ahead, HTC just issued a warning to investors that its fourth quarter revenue will fall up to 15 percent from the previous quarter, Reuters reports. Not good.

HTC now finds itself in cost cutting mode. It started with the sale of its 24.85 percent stake in Beats Audio for $415 million, as well as selling off 100 percent of its stake in digital content provider Saffron Digital for $47 million. That gives HTC a short-term infusion of cash, but looking ahead, something needs to change.


Unfortunately, HTC is being forced to focus on the budget phone market.

"We're looking at broader products in this quarter...we aim for higher volume into 2014 that will give better profitability," company financial chief Chialin Chang said in reference to less expensive handsets, according to Reuters.

It wasn't that long ago when HTC set a goal of capturing 20 percent of the high-end smartphone market in China, but with Samsung and Apple making things so tough, HTC is now looking at budget handsets. As an owner of the HTC One, a brilliant Android handset (see our review) that has me feeling content enough to skip Google's Nexus 5 (at least for now), I can only hope HTC doesn't abandon the high-end market altogether.