HTC UK is to slash the size of its smartphone portfolio this year and focus on delivering a few key ‘hero’ devices in a bid to claw back market share.
The company’s u-turn follows disappointing global results earlier this month when first quarter net profit fell 26% to $365m, its first quarterly decline in earnings for two years as it faced competition from Apple and Samsung’s Galaxy range.
HTC UK chief Phil Roberson (pictured) told Mobile the manufacturer will return to a strategy of launching a limited number of high-spec devices this year, with a focus on second quarter releases. He said: ‘We have to get back to focusing on what made us great – amazing hardware and a great customer experience. We ended 2011 with far more products than we started out with. We tried to do too much.
'So 2012 is about giving our customers something special. We need to make sure we do not go so far down the line that we segment our products by launching lots of different SKUs.’
The manufacturer will take a backseat in the tablet market in order to focus on smartphones, although Roberson stressed the company was not exiting the sector completely.
Analysts described the change in strategy as encouraging, with HTC offering a more streamlined product line with a more coherent identity for consumers. However, the company was warned the strategy was not without risk and could take some time to implement.
CCS Insight analyst Ben Wood said: ‘If you rationalise your portfolio you have to deliver a ‘hero’ product, but the margin for error increases and you have fewer products to fall back on.’ IDC’s Francisco Jeronimo said HTC had ‘great’ products but it did lack the marketing spend of a company like Samsung, which closed 2011 in an impressive position.
Roberson insisted the company had a strong 2011, even in the latter half of the year. He said: ‘We had a fantastic year, with 65% growth year on year in the UK. But in Q4 we delivered a lot more products than in the past. Now we want to create more of a ‘hero’ approach. We make great phones, but it is hard to do that when the portfolio is spread too much.’
Editor: Carol Millett