Ina Fried

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HTC Hopes New Mid-Tier Phones Will Help It Amid Tough Competition

While HTC has managed to regain some lost ground with its high-end HTC One, the company continues to struggle in other parts of the market.

peter chou at d8 (3)

The Taiwanese phone maker said on its earnings conference call on Tuesday that it is planning new products for midrange that will arrive either late in the third quarter or early in the fourth quarter.

“These series of mid-tier products will help us to regain market share and momentum,” CEO Peter Chou said on a conference call with investors. The company also recently launched a smaller version of the HTC One — the HTC One Mini — and is also planning to start selling the HTC One at Verizon.

While sales rebounded some last quarter, thanks to the HTC One, the company said it expects a further dip in sales for the third quarter, in large part due to the weakness in the midrange and low end of the market.

The company said current quarter sales should dip to between 50 billion and 60 billion New Taiwan Dollars ($1.67 billion to $2 billion), down from the second quarter’s NT $70.7 billion ($2.36 billion).

Profit margins are also taking a hit, HTC said, as the company has failed to see hoped-for reductions in building the HTC One.

“Scale is one of our challenges, and we recognize that,” Chou said. However, he rejected the notion that the company needed to reduce its investments, saying that HTC needs to continue to invest in both marketing and engineering. “The market is quite competitive right now. We are investing in lots of areas right now to establish our long-term value.”

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I think the NSA has a job to do and we need the NSA. But as (physicist) Robert Oppenheimer said, “When you see something that is technically sweet, you go ahead and do it and argue about what to do about it only after you’ve had your technical success. That is the way it was with the atomic bomb.”

— Phil Zimmerman, PGP inventor and Silent Circle co-founder, in an interview with Om Malik