HTC's Only High-End Smartphone Of 2019 Could Feature AI, 5G And Crypto Capabilities

HTC will probably do this year what analysts say it shouldn’t: launch a new high-end smartphone. The Taiwanese developer responsible for developing some of the world’s first Android handsets has seen income, staff and customers decline since 2015. Thin marketing and a drop in R&D amid growing competition brought HTC to this point, experts say.

The company, led by Cher Wang, a scion of one of Taiwan’s wealthiest families, will release a handful of phones in 2019 with one model in the high-end range but not necessarily part of the U-series that has dominated its portfolio since 2017, analysts who follow the company say.

Aiming for the High End

The single high-end phone, if that’s the actual number of releases this year, will probably come with features that incorporate artificial intelligence, tap into blockchain technology and work with 5G, industry analysts believe. HTC’s Exodus model — released last year with cryptocurrency trading features — might have already set this stage.

“HTC is not planning a HTC U13 or any “variant” this year based on the U-series flagship phones of 2017 and 2018,” news and data website XDA Developers reports. The U-series flagship handsets were a “flop” in 2017, it says, and led to an even “rougher” 2018. “Despite all of this, they’re not done with smartphones just yet,” the commentary says. “The company plans to continue putting out new phones throughout 2019.”

The company will struggle to keep pace with Chinese brands of mainstream Android handsets for lack of R&D funds, says Eddie Han, senior industry analyst with Market Intelligence & Consulting Institute in Taipei. “Compared to years in the past, HTC seems to move into a relative niche market, such as customized phones and blockchain phones, and is very likely to stay in the non-mainstream phone business in the future,” Han says.

“We expect HTC to release just seven main smartphone models across all price bands worldwide in 2019, compared with seven in 2018, and six in 2017,” says Neil Mawston, executive director for wireless devices with market research firm Strategy Analytics in the U.K. “HTC no longer has the R&D budget to be a mass market player and launch dozens of phones like Samsung or Huawei.”

But Wang, the 60-year-old daughter of late Formosa Plastics cofounder Y.C. Wang, is working to turn the company’s sales and operations around, particularly overseas. HTC is still battling for a greater share of the smartphone market in China and developing Asia, for example.

HTC representatives declined to comment on its product releases for 2019.

HTC Needs a Pick-Me-Up

The list of HTC’s recent losses goes on and on, but most notably the company said in July that it would lay off about one-fifth of its total workforce. Three years ago it cut 2,300 jobs and was removed from Taipei’s blue-chip stock index. The manufacturer reported a net loss of $546 million for 2017, its third straight year of failing to turn a profit. Most recently, HTC posted an $85 million net loss in the third quarter of last year.

The 21-year-old firm has shed its share of the global smartphone market since hitting a peak of 10.7% back in 2011, according to IDC data. It stood around 1% last year.

More on Forbes: Snapdragon 855 Will Power Android Phones in 2019 With Blazing 5G And AI

But the company that has gradually shifted its focus under Wang’s leadership toward cameras and virtual reality gaming hardware (a likely highlight this year) won’t get much of an income boost from its 2019 phones, says Kiranjeet Kaur, research manager with IDC’s Asia-Pacific Client Devices Group.

“The challenge for HTC is that it doesn’t have enough ‘strong’ markets that it can depend on,” Kaur says. “Even if it gets highly competitive phones with great specs and price, it will be very hard to make a comeback and start working on its brand and distribution all over again.”