HTC introduces Desire 616 and One E8, but where are the budget smartphones?

Struggling Taiwanese smartphone maker HTC launched two new devices in India: the One E8, a cheaper version of the flagship One M8 and the Desire 616 dual-SIM device. The HTC One E8 is priced at Rs 34,900, the Desire 616 is priced at Rs 16,900.   Despite the fact that HTC is facing heavy losses (close to $100 million in Q4 2013 alone), the company’s executives were confident that the new range of devices would help them bounce back both in Indian market and the global market.   HTC is hoping that 2014 will be their year but it’s not going to be such an easy task given that the high-end smartphone market has largely stagnated across the world, with most analysts predicting that it is now time for sub-$100 smartphones to rule.   We spoke to HTC’s CFO Chian-Lin Chang after the launch event on the expectations from the new devices and he said that HTC was not jumping in the sub-$100 category, at least for now. Chang added that HTC plans to concentrate on giving good consumer experience and thus woo the mid-segment buyer.   On expectations from the Indian market, the CFO said, “Our expectation is very clear. We want to be one of the top three recognised brands in India. In terms of market share, we want to be one of the top five market share brands in India. We hope that each product will be a strong driver in their price-tier. We have a flagship product selling at  Rs 49,999, then we create this fashion edition for a price of Rs 34,900. We then have the Desire series. Hopefully between Rs 10,000 to 30,000 we have a lot of models.”   It was clear from the launch event that HTC will target the mid-range consumer more aggressively. Currently in the sub-$100 category HTC has only the Desire 210 in India. It does seem like a smart move targetting the mid-range audience, as this is the one that has probably used a cheaper smartphone before. This is also the group that is now looking for a better device, one that has a good brand name to offer without inflicting too much damage on the pocket. And thus a brand like HTC does hold the potential of being a strong second smartphone buy for mid-range users.   But with the flood of budget smartphones, a brand isn’t enough to stand out from the crowd. So has HTC priced its phones too high? The CFO doesn’t think so. “We have to ask, for every price-tier are you able to deliver the grand promise to the consumer? If we can, we do it. Desire 210, we introduced in India, we think it will fulfil that quality service. Below that we’ve been thinking, we’re not so sure,” said Chang.   Quality service is of course an important point, given that a lot of smartphone brands in India face the ire of users due to poor customer care service. The mid-level segment is where HTC’s CFO felt that the company can grow the most.“Between 10 to 30 is a big broad spectrum. Our Desire family is in this spectrum and we feel we have a lot to grow there. We are exploring below Rs 10,000, and if we go below that, we’re not sure we can do that without compromising on the consumer experience. First thing is not competition, it’s whether this is good consumer experience or not. Maybe a couple of months from now, we’ll figure a way to do that, " he said.   On supply chain issues that plague and ruined the launch of the original HTC One smartphone, Chang said that the company was trying to work on those too. “We’re fixing some of the supply chain issues. We introduced the One E8, this model is shipping earliest in India. Desire 616 is shipping right away. We want to make sure that India is the first one getting some of the models, it’s very key for us to do that,” he said.   He added that where the Indian market is concerned, they are hoping to use their brand name to their advantage, one that they seem to have squandered in the last two years. “What we like about here is that consumers still like the HTC design and they associate us with good experience and service and we want to capitalise on that. Hopefully we’ll catch up very quickly,” he said.   Where the latest smartphone market share numbers go, HTC is far behind. IDC data showed that Samsung is the clear leader, followed by Micromax, Karbonn, Lava, Nokia and then others. It should be noted that others have a 30 percent smartphone market share in India, just five percentage points short of Samsung. But the problem for HTC is that this list of others is going to get bigger in India.   From Gionee to Oppo to Xiaomi,a number of Chinese competitors are ready to deliver top-end specs even in the mid-budget segment. This means that HTC’s attempt at recovery is not going to be so easy, despite the company exuding some new-found confidence.