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HTC stopped innovating on smartphones, new CEO admits

Several months back, we invited HTC cofounder and CEO Cher Wang to appear on stage at TechCrunch Disrupt. Sometimes, however, life happens. Two weeks ago, the company announced that Wang would be stepping down from the role, which would immediately be filled by longtime telecom vet, Yves Maitres. Thankfully, the former Orange exec also agreed to appear on stage at this week’s event.

Maitres took the stage immediately following a one on one with OnePlus cofounder, Carl Pei. The contrast of the two companies couldn’t be more stark. In six short years of existence, OnePlus has managed to buck a number of industry trends with a controlled growth that flies in the face of wider industry smartphone trends.

HTC, meanwhile, has been struggling for years. In Q2, the Taiwanese hardware maker posted its fifth consecutive quarterly loss. Last July, it laid off around a quarter of its staff. It’s been a precipitous fall. In 2011, the company comprised around 11 percent of global smartphone sales, per analyst figures. Now its figures are routinely classified among the “Others” in those reports.

Speaking to Maitres at an event such as this offers a rare opportunity for insight from a newly minted exec who has spent years watching his new company from the outside. As such, he addressed HTC’s struggles with a refreshing candidness.

“HTC has stopped innovating in the hardware of the smartphone,” he told the audience. “And people like Apple, like Samsung and, most recently, Huawei, have done an incredible job investing in their hardware. We didn’t, because we have been investing in innovation on virtual reality. When I was young, somebody told me, ‘to be be right at the wrong time is to be wrong and to be wrong at the right time is right.’ I think we’ve been right at the wrong time and now we have to catch up. We made a timing mistake. It is very difficult to anticipate the time. HTC made a mistake in terms of timing. It is a difficult mistake and we are paying for that, but we still have so many assets in terms of innovation, team and balance sheets that I feel we are recovering from the timing mistake.”

‘Timing,’ here, is primarily a reference to the company’s decision to move much of its R&D money into XR (primarily VR through its Vive wing). Maitres said he anticipates that HTC’s XR offerings will overtake the mobile side in about five years.

“We’ll do our best to make it shorter, but customer adoption is key,” he explained. “How people are adopting your technology. And we all know know it is absolutely critical. And the end of the day, we have human beings in front of us, and they’re dealing with something total new and totally unusual, which is virtual.”

On the mobile side, Maitres sees 5G as the primary bottleneck to growth. Contrary to suggestions that the company’s best play is in developing nations, he says HTC’s play going forward will be more premium handset focused on “countries with higher GDP.”

“The competition is changing,” he says. “We’re all having a situation where worldwide marketshare is going down and the customer is disappointed in not being to have the latest Huawei phone anymore. How to give our customers the ability to come back to what they wish, in terms of best in class hardware and photography that HTC to will to solve in the next few months.”

While figures will largely be dependent on decisions Brough to HTC’s board, Maitres maintains optimistic projections when it comes to returning the company profitability.

“I truly believe that it is going to depend on the way carriers deploy 5G,” he says. “And you know that 2020 will bee the starting point for 5G. Usually it takes two years to deploy a network. So 2023 will have significant coverage. That’s why I believe that 2025, probably even earlier will be the turning point. We are dependent on carrier deployment speed.”

Google brings its ARCore technology to China in partnership with Xiaomi

Google is ramping up its efforts to return to China. Earlier this year, the search giant detailed plans to bring its ARCore technology — which enables augmented reality and virtual reality — to phones in China and this week that effort went live with its first partner, Xiaomi.

Initially the technology will be available for Xiaomi’s Mix 2S devices via an app in the Xiaomi App Store, but Google has plans to add more partners in Mainland China over time. Huawei and Samsung are two confirmed names that have signed up to distribute ARCore apps on Chinese soil, Google said previously.

Starting today, #ARCore apps are available on Mix 2S devices from the Xiaomi App Store in China. More partners coming soon → https://t.co/16QoOTgqve pic.twitter.com/lT4TYXrzwF

— Google AR & VR (@GoogleARVR) May 28, 2018

Google’s core services remain blocked in China but ARCore apps are able to work there because the technology itself works on device without the cloud, which means that once apps are downloaded to a phone there’s nothing that China’s internet censors can do to disrupt them.

Rather than software, the main challenge is distribution. The Google Play Store is restricted in China, and in its place China has a fragmented landscape that consists of more than a dozen major third-party Android app stores. That explains why Google has struck deals with the likes of Xiaomi and Huawei, which operate their own app stores which — pre-loaded on their devices — can help Google reach consumers.

ARCore in action

The ARCore strategy for China, while subtle, is part of a sustained push to grow Google’s presence in China. While that hasn’t meant reviving the Google Play Store — despite plenty of speculation in the media — Google has ramped up in other areas.

In recent months, the company has struck a partnership with Tencent, agreed to invest in a number of China-based startups — including biotech-focused XtalPi and live-streaming service Chushou — and announced an AI lab in Beijing. Added to that, Google gained a large tech presence in Taiwan via the completion of its acquisition of a chunk of HTC, and it opened a presence in Shenzhen, the Chinese city known as ‘the Silicon Valley of hardware.’

Finally, it is also hosting its first ‘Demo Day’ program for startups in Asia with an event planned for Shanghai, China, this coming September. Applications to take part in the initiative opened last week.

HTC drops price of Vive by $200 as it looks to compete with Facebook’s aggressive VR pricing

 Just as reality appears to be getting worse by the day, VR companies are doing the lord’s work and making the price of escaping it a bit more accessible. HTC is dropping the price of its Vive virtual reality system from $799 to $599 as the Taiwanese tech giant seeks to compete with aggressive price cuts coming from Facebook-owned Oculus and their Rift headset. At the beginning of the… Read More

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