Towards the end of last year, Sony appointed a new head of the mobile, Hiroki Totoki, and said it would reduce the number of smartphone models it made in order to increase profits. “Our urgent task is to make the business profitable even if we face declines in sales by 20% or 30%,” said Totoki in November. Sony has reduced its smartphone shipment forecast for its current fiscal year, which ends on March 31, from 50 million units to 41 million, and in October, took a $1.5 billion impairment charge on the business.
By contrast, another struggling Asian vendor, HTC, can see the light at the end of the tunnel. It reported its first quarterly revenue increase for more than three years in Q414, and was profitable for the third quarter in a row. Sales were $1.5 billion (NT$47.9 billion), up from $1.34 billion a year earlier, the first gain since the third quarter of 2011. Net income was $14.73 million, beating the $6.64 million analyst forecast.
After those figures, HTC felt confident enough to map out a growth plan, and another profit in the fourth quarter. This will focus, like those of its rivals, on expanding its base technologies and designs to the wider range of connected products. It will now develop offerings, to be marketed in parallel with the smartphones, in four categories – Connected Life (sharing of personal media with gadgets like the RE camera); Connected Self (organizing mobile health, fitness and other personal areas); Connected Entertainment (access to content); and Connected Home.
The company said it aimed to launch at least one product in each of the categories by the end of the year.
According to CNET, Jeff Gattis, executive director of marketing for HTC’s emerging devices business, said the firm would have to rely on partners in some areas, and be selective about its choices. We “can’t afford to just throw products into these categories that everyone else is in and expect to win. For us it’s being thoughtful in each of these four categories in a way that is unique and differentiated,” he said.
The newest approach to handset design for 2015 is the modular phone, as seen in Google’s Project Ara and several Finnish start-ups founded by former Nokia people. The first public ‘market pilot’ of the Lego-like Ara concept will come later this year, after the second developer’s conference in February, and ahead of that, Google has released the second major release of its toolkit, enabling third parties to create and submit modules. These will be certified and accepted into the Module Marketplace in a similar way to an app store process.