Market Insight

HTC brings a knife to the camera market gunfight with the RE

October 09, 2014  | Subscribers Only


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HTC is launching a smart camera accessory called the RE, priced at $200. The RE connects to either an Android or an iPhone and allows the user to capture still images or videos through its 16MP sensor.

To increase the RE's appeal for mobile operators, a software update for the RE will add the ability to live stream video to YouTube via a connected smartphone.

The RE can record 1080p video at 30 frames per second or record slow motion at 720p. The design is shaped like a periscope and is waterproof with an IP rating of IPX7. The RE comes with a 8GB SD card for storage, upgradable to 128GB.

Our analysis

HTC is now floundering in the smartphone market having once been one of the leading Android manufacturers. At its peak in 2011, HTC held 11% of the global smartphone market share with only Nokia, Samsung and Apple ahead of it. Now HTC scrapes only 2% market share, good enough to make it the 14th largest smartphone manufacturer, behind brands such as Oppo and Coolpad. HTC is struggling financially too; it has lost money in three of the last five quarters and managed a measly 0.4% operating margin in Q3 2014.

It is therefore no surprise that HTC is looking to branch out beyond smartphones in an effort to boost its sales and revenues. It should be possible for HTC to succeed doing this. It has produced arguably the best designed smartphones of the past two years, so turning this expertise to an area like smartwatches where the leaders struggled to make attractive designs would be logical.

But expanding to the congested connected camera space is a very strange decision. Not only is the camera space highly competitive with many established specialist players, such as GoPro, but key HTC smartphone competitors also have dedicated camera units. Both Samsung and Sony are better placed to succeed with a connected camera than HTC because of their significant camera businesses. These players have years of expertise and technology in cameras and they also have financial resources HTC will never be able to match. Additionally, the cameras included in HTC’s flagship smartphones, the HTC One M8 and its predecessor the One M7, are widely considered the weakest aspect of the phones.

Ironically, HTC basically admitted failure with the “ultrapixel” technology it pioneered on the One M7 and One M8 at the same time by announcing the Desire Eye. Rather than using a 4MP sensor with large sensors, the Desire Eye opts for a standard 13MP sensor. The dual-sensor design on the One M8 remains a unique camera technology, but the benefits of this approach are questionable when the same depth-of-field effect has been achieved by competitors using a single sensor and software.

HTC isn’t simply entering a new fight. With the RE, HTC is bringing a knife to a gunfight. There are more attractive adjacent markets to smartphones which HTC should have chosen to enter first, ahead of cameras.

Organization
HTC HTC Corp.
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