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Forget the One (M8), it’s the Desire line that may actually save HTC

HTC Desire 816 aa 6
So the HTC One (M8) is out, the reviews are in, and I think we can say that, just like the previous model, it is easily a candidate for this year’s best smartphone. That means HTC is saved, right? Not so fast. They have been down this route before.

But making the best smartphone in the world had not bailed HTC out of its financial troubles.

The original HTC One was introduced in February 2013, and by April it had hit most markets in the world. By the end of September, according to ABI Research, HTC’s global market share was 1%. To put that into perspective, 1% is the same market share as that of Xiaomi, a three-year old startup that at the time was only operating in three markets, one of which is a city state smaller than New York.

How could this have happened?

The New York Times thought that it was down to their marketing. However, I beg to differ. I believe HTC’s biggest mistake was its failure to compete in emerging markets.

In January, research firm Gartner reported that the majority of smartphone sales growth in 2013 came from the emerging markets. Many analysts agree that this trend is going to only get stronger in the future.

Let’s use the fastest growing smartphone market in 2013, India, as a proxy to understand what has been happening in these high growth markets. The following figure shows the top smartphone vendors in India in Q3 2013 which was the first full quarter in which the HTC One was available in the market.


If marketing was the most important piece in HTC’s failure last year, why is it that Micromax and Karbonn were the two companies hot on Samsung’s tail in India?

Those who spent some time in India last year would notice that Apple had been making a strong marketing push in the market. Yet Apple’s figure is lingering close to the relegation zone, while Micromax and Karbonn’s figures combined is as big as Samsung’s and 14 times the size of Apple’s.  Furthermore, according to IDC, Apple was kicked out of the Indian top 5 list of smartphone vendors in Q4 2013.

Understanding emerging markets

To understand HTC’s challenge, one needs to understand the defining features that differentiate developing markets from mature markets.

First is the total absence (or at least limited impact) of carrier subsidy. Smartphones in these markets are sold at retail directly to end users just like microwave ovens, cars, and pretzels.

The second characteristic was first pointed out to me by an India-based analyst, Sameer Singh, in what he called “usage-based smartphone segmentation”. Basically, consumers who are in the market for low-end devices are looking to get their first connected device. Typical use case scenario for consumers in this bracket are communication, social networking and light media consumption.

Meanwhile, those looking to purchase midrange devices are looking to not only replace their old phones but also to replace their netbooks as their only personal connected device. Thus, to attract these type of consumers, devices have to fulfill the typical roles of a smartphone, but also be good at performing tasks that in the past were associated with netbooks. This explains the rapidly rising popularity of low-cost smartphones but also of phablets in these markets, as reported by IDC.

Combining these traits with the low average income prevalent in these regions, we can build a picture of how the average emerging market consumer view smartphones based on their prices, and where HTC’s 2013 offerings sit in these markets.

1. The low end

Smartphones available for under 0 belong to this category. This is the segment in which non-phablets can be expected to be successful in the emerging markets. You might have heard how Nokia’s Lumia 520 enjoyed quite a success in the emerging markets last year. This was the reason why. This also explains why after tax, the Moto G is selling for around 0 – 0 in the emerging markets, which means that it sits inside the price bracket where such a device can be expected to gain the most attention.

Motorola Moto G aa 8

The Moto G has put Motorola back on the map

In India, local manufacturers like Karbonn were bringing quad-core devices into the sub 0 segment, while HTC practically went AWOL.

2. The mid-range

The segment covers devices priced between 0 and 0 off-contract. This is the segment in which most of the rapid growth of phablets happened. In India, local manufacturers made a strong showing in this segment with both Micromax and Karbonn offering 720p phablets for around 0. Elsewhere in Asia, regional players like Lenovo flooded the market with phablets that had 720p screens and quad core processors with price tags between 0-320.

Samsung’s Galaxy Grand might have caused confusion among critics in the developed markets, but from the emerging market’s perspective, it allowed Samsung to have a phablet device that was available for under more than alternatives from local and regional players. Sure enough, it quickly became the affordable phablet to beat.

galaxy grand 2 press

With its mid-range specs and Note 3 inspired design, the Grand 2 is the phone to beat in emerging markets

HTC had three models in this price bracket. The Desire 300, Desire XC and the Desire 600. Looking at their specs, primarily their 4 to 4.7-inch WVGA screens, it’s easy to see why none of these devices have made a splash.

3. The high-end

As we have demonstrated above, this is the least important segment in terms of looking for growth in the emerging markets. Consumers in this segment not only have significantly higher purchasing power but also access to various financing plans. This means, they are the least sensitive to pricing, as the difference between purchasing a 0 phone and getting an 0 one is less than 50 bucks if they buy the phone under a 12 months financing plan.

This is why the HTC One Mini did not do much to help HTC in 2013. At 0, from the perspective of high-end emerging market consumers, the 4-inch phone was competing against  the Galaxy S4, the iPhone 5, even HTC’s own original One.

HTC One Mini

The One Mini was too expensive for the experience it offered

Why HTC’s new Desire phones are probably HTC’s most crucial models this year

HTC’s failure to understand the needs of buyers in fast-growing markets was one of the primary culprits of its problems throughout 2013.

The good news is that, unlike last year, HTC now has devices with the potential to turn its fortunes.

But the One (M8) is not one of them.

Think of the new HTC One (M8) as the Mercedes S Class. It’s okay to build something that is a proud demonstration of what is currently possible. However, the majority of Mercedes-Benz models sold is the C Class, not the S Class. Without generations after generations of competitive “affordable” models, Mercedes would have probably ended up being a small niche player. This is why Autocar magazine thinks that the new C Class is Mercedes’ most important model.

This is also why HTC’s new Desire 610 and Desire 816 are keys to HTC’s survival.

And, from the look of it, the Desire 610, with its quad-core Snapdragon SoC and 4.7-inch display, has a good chance to shake things up in the sub 0 segment.

Competition in the low-end bracket is certainly harsher this year, with the availability of devices like the Moto G, Nokia X phones, as well as updated models from regional players. However, the Desire 610’s design pedigree, as well as its widespread brick and mortar availability, may hopefully sway some consumers down HTC’s way, if it’s priced right.

HTC Desire 610 All Colors

HTC Desire 610

Meanwhile, competition in the mid-range bracket has not been standing still either. Everyone’s brand-to-beat, Samsung, has updated the Galaxy Grand with specs that are now on par with the competition. The 0 Galaxy Grand 2 now comes with a 5.25-inch 720p screen and quad-core Snapdragon 400 chipset.

Nevertheless, the Desire 816 still has a good chance to compete. Specifically, compared to the Galaxy Grand 2, HTC’s Desire 816 still has some competitive advantages that could pull consumers away from Samsung’s grasp.

HTC Desire 816 aa 2

HTC Desire 816

Like the Desire 610, its design is inspired by what is arguably the world’s best built smartphone. That design also comes with HTC’s signature front facing speaker setup, which consumers who consume lots of media will surely find attractive. It also has a larger screen than the Grand 2. Considering how consumers in this price range are big on getting the most computing potential from their investments, having a bigger screen should certainly help HTC’s cause.

However, just like with the Desire 610, all this is reliant upon the assumption that HTC will set the Desire 816’s price to be competitive in the lower mid-range segment (under 0).

The worst thing for HTC to do is to set this phone’s price the way it set the One Mini’s in 2013.

The Desire 610 and Desire 816 are not the only ones with the potential to turn HTC’s fortunes this year.  HTC also has a Mediatek powered device that’s set to hit the world’s biggest smartphone market, China, very soon.

It is clear that HTC now has the devices that could allow them to take advantage of the rapid growth of the developing markets, which is a far cry to what they had last year. If HTC can price them competitively, these phones could be HTC’s much-awaited get-out-of-jail card.

Android Authority

LINE takes on giants, introduces video calls and snap movie clips

LINE is stepping up it efforts to make a name for itself in the global market and is now introducing two new features that will put the Asian contender head to head with other players in the field. Starting today, users of the Internet-based messaging service will be able to make video calls and post short video clips, all for free.

415e0bc16540x540.jpg LINE takes on giants, introduces video calls and snap movie clips

Video calls, once the domain of Skype and even of Apple with its Face Time app, has become a staple of Internet messaging services these days. One could say that LINE is somewhat late to the scene, with rivals Viber and WhatsApp already supporting the feature. But, better late than never as they say, and so the service is adding free 1-on-1 video calls to its features. Unlike Google+ Hangouts, though, it doesn’t seem to mention any support for group or conference video chats.

As a messaging service, it is sometimes easy to forget that LINE is also a social networking platform, with a “Home” and “Timeline” feature that lets users share their thoughts or statuses with other contacts, pretty much like Twitter. In fact, similar to the popular microblogging service, LINE has added Snap Movie, a feature that lets users take and share 4 to 10 second video clips. LINE users can put such videos on their home or timeline pages and even mix it up with their choice of background music.

8a7d05f87140x3371.jpg1 LINE takes on giants, introduces video calls and snap movie clips

Video call and Snap Movie support is rolling out to its apps on Android and iOS as well as on PCs and Macs. It remains to be seen whether such features will help LINE achieve on a global level the success that it enjoyed in East and Southeast Asia.


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Samsung looking for suppliers of metal casings. Galaxy S5 first in line?

Samsung Logo

Catcher, the Taiwanese company that makes the metal bodies of the HTC One and the iPad, is said to be in the final stages of securing a massive order of metal cases from Samsung.

According to a research note from Barclays analysts cited by the Taipei Times, Samsung is close to making a final decision on the suppliers of the metal body of “at least one of its high-end smartphone models from the second quarter next year”. Catcher is qualified as an approved supplier of 10 to 30 million units, but Samsung will reportedly place the final orders next year, based on the bids it receives. The Barclays research note is based on checks in the supply chain.

If Samsung keeps its release pattern, the Galaxy S5 will likely hit stores in early Q2 2014.

Last month, Korean media reported that Samsung has set up a production line in Gumi, South Korea, to manufacture test batches of metal casings for flagship Galaxy devices. The company is reportedly setting up a mass production line in Vietnam.

For popular devices like the Galaxy S series, Samsung needs to secure components from multiple sources, to ensure supplies and reduce risks. If the reports that the Galaxy S5 will be made of metal are accurate, the Korean company is likely going to split production between its own facilities and external suppliers, both from South Korea and from abroad.

Samsung has been intensely criticized for using plastic as the primary build material for its high-end smartphones. While the merits of plastic, glass, and metal are a source of endless debate among smartphone users, it’s hard to deny that metal phones withstand accidents better, as our recent iPhone drop test shows.

Samsung has adopted texturized plastic imitating leather for the Note 3’s back cover, so it’s safe to assume that at least the much denigrated glossy plastic is being phased out.

Android Authority

The Nexus 7 sleeve is in stock, but the pricing is out of line

Nexus 7 sleeve

The Nexus 7 is the darling of the tablet world, and has been since its inception last year. Like any Nexus product, it pushes the envelope for the hardware/software marriage of Android.

What it isn’t, however, is rugged. If you’ve seen our drop test for this years’ device, you’ll know it falls short (pun intended!) of being a device that can stand to get knocked around. So, if you don’t think you need a way to protect the device, think again.

For 66% of the cost of the sleeve, you get it shipped to you.

Like most people, you’re probably more apt to have official accesories. The sleeve for the Nexus 7 is a nice one, too: microfiber lining, fitted, asymetrical zipper, neoprene outer shell. It’s also got a smaller pocket on the outside, just like a proper sleeve should!

The sleeve sells for .99, which isn’t a bad price at all — until you go to checkout. Currently, the Play Store is charging nearly in shipping. For 66% of the cost of the sleeve, you get it shipped to you. That’s not including tax, which could push the total cost to just over .

In a time when Amazon has perfected fast, cheap shipping, especially for an item that simply needs to be slipped into a padded envelope with a mailing label slapped on, this is abhorrent. I’d like to assume this is some sort of glitch, as the Play Store has recently begun offering multiple shipping options, so I’ll reserve total judgement for now. If it doesn’t change, though, there are plenty of wonderful options available via Amazon.

Android Authority