HTC leaves ‘ultra competitive’ entry-level smartphone market to focus on turning a profit

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Expect only mid-range and high-end flagships from HTC moving forward.

HTC is hoping that less is more when it comes to smartphone offerings. Chia-Lin Chang, President of HTC’s Smartphone and Connected Device divisions, says the Taiwanese company will stop chasing high sales numbers in the entry-level smartphone markets and instead focus on designing and selling highly profitable devices.

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This news comes from HTC’s quarterly conference call with investors, wherein the company announced a fourth straight quarter posting an operating loss. When asked how the company plans to shift its strategies for 2017, Chang responded in part by saying “We are going to get out of the entry level part, which I think is ultra competitive and we’re not necessarily going to benefit from a profitability perspective here. To us, profitability on the smartphone is going to be quite important.”

Chang continued by saying the company plans to focus on mid-range to high-end products moving forward, stating the company is planning to release only seven “key SKU” (stock-keeping units) in 2017.

The strategy does make sense, given how crowded the budget phone space has become —especially in the competitive overseas markets of China and India. Instead of chasing high sales figures with cheaper devices, the plan will be to focus on mid-range devices and premium flagships with higher profit margins — such as the forthcoming HTC U Ultra and U Play.

Only time will tell if this new strategy will lift HTC’s smartphone division out of the red, but at least we’re sure to see the top tier of smartphones from HTC moving forward.