HTC’s latest flagship smartphone will struggle to increase its market share in the face of bigger marketing budgets from leading vendors and rising competition from emerging markets, according to leading analysts.
The M8 runs the latest version of Android and is powered by a 2.3GHz quad-core processor with a 5-inch full high-definition screen
Analyst firm Gartner said HTC’s global share of the smartphone market declined to 2.2% in the third quarter of 2013, down from a peak of 10.3% in 2011. The Taiwanese firm said it now hopes to grow its market share to over 5% by the end of this year and 10% in three years.
Francisco Jeronimo, research director of European mobile devices at IDC, told CBR while he believes the device "is definitely one of the best smartphones on the market", bigger marketing budgets from other vendors such as Samsung would continue to put the company at a disadvantage.
"The investment in the channel is what makes the difference at the end of the day. If you go to any store in London for example, the first option most likely you will be given is a Samsung, the second option a Samsung, the third option a Samsung," he explained.
"And the reason why sales people tell you to buy a Samsung handset because it’s an easy sale and the commission they get on sales are quite high… they don’t care if HTC is better or not.
"Samsung has been growing so fast in the last couple of years because they’ve been pay ten times more in sales commission than any other vendor to the retailer and operators."
HTC is also threatened from rising players coming from the lower end, such as Huawei and Lenovo, according to Annette Zimmermann, an analyst of consumer markets and technology at Gartner.
"Huawei announced some pretty decent devices at Mobile World Congress in February that are from a design perspective quite close to HTC’s offering. Huawei had its marketing message around photography and sharing – at a lower price," she told CBR.
When asked how M8 compares to Samsung’s Galaxy S5, she said: "I personally think that Samsung could have done better on the design (this is with specific hindsight to the back side of the phone that looks like leather but is plastic).
"It looks less elegant if you compare it to the M8…the fact that they focused on innovation around one of the most frequent use cases on a phone – the camera – will help them to get noticed by consumers."
Tuong H. Nguyen, another Gartner analyst, said that HTC needs to extend its ecosystem as the high-end of the smartphone market slows down over the coming year.
"It’s not just about the hardware itself, it’s about the underlining ecosystem and all the devices and services and applications that it lets you connect to," he explained.
"The ability for any vendor to be able to enhance and integrate themselves into the rest of my digital life is really the key, not so much the device… The company that can provide this holistic solution will likely garner the loyalty earlier on."
