September 20, 2012 / 2:42 AM / 6 years ago

HTC unveils two Windows phones, multiple customers

NEW YORK (Reuters) - HTC Corp unveiled on Wednesday two smartphone models running Microsoft Corp’s Windows Phone 8 software and said the devices would be available in November through multiple wireless service providers around the world.

The two brightly colored phones — the Windows Phone 8X and the Windows Phone 8S — will pit HTC directly against key Microsoft partner Nokia, which earlier this month also launched two colorful Windows phone models.

Like Nokia, HTC is under pressure to generate strong sales from its next round of smartphones as it has lost significant ground to Samsung Electronics and Apple Inc.

With Apple boasting 2 million pre-orders of its latest iPhone before it hits store shelves on September 21, Reticle Research analyst Ross Rubin said it was going to be challenging for HTC to catch up.

However, HTC, which has generated most of its sales from phones based on Google Inc’s Android software in recent years, will be able to count on marketing help from Microsoft.

The new devices will be marketed as the “signature” Windows Phone 8 smartphones, Jason Mackenzie, HTC’s global head of sales, told attendees at the company’s New York launch event, where Microsoft Chief Executive Steve Ballmer also came on stage.

“Consumers are going to love these phones, and we’re committed to reaching them in a manner that’s clear and direct,” Ballmer said.

Shares of HTC climbed as much as 2 percent in early trading in Taipei before erasing the gains being down 0.16 percent by 0216 GMT. The broader market fell 0.42 percent.

Some fund managers were wary of the ability of the new Windows phones to result in much stronger sales for HTC in the fourth quarter, despite their good designs and form factors, as the market share of the Microsoft’s operating system remains small.

“Even with the rumored new Android models coming up, HTC’s performance will be so-so this year, because its phones are still lagging behind Samsung,” said Michael On, a managing director of Beyond Asset Management in Taipei, which does not own HTC shares.

The success of HTC and Nokia Windows Phone 8 devices this holiday shopping season will be crucial to Microsoft, which has been left far behind by Apple and Google in the smartphone software market in the last several years.

Gartner analyst Michael Gartenberg said HTC and Nokia were smart to distinguish the appearance of their devices from iPhone with bright colors as it could make them stand out to customers who want an iPhone alternative.

“The best thing about these device ranges is that neither looks like an iPhone,” said Gartenberg, who added that competition between Nokia and HTC will also help to generate some publicity around Windows Phone 8 software.


Taiwan’s HTC was able to share more signs of success at its device launch event in New York than did Nokia at its phone launch here earlier this month.

While Nokia did not name any customers for its latest Lumia phones, HTC said that together its two new phones would go on sale at 150 operators in 50 countries around the world.

For example, it said that either the X8 or the XS will go on sale at three of the top four U.S. mobile operators - Verizon Wireless, AT&T Inc and T-Mobile USA.

Until now, HTC has been betting on its One series of phones, but so far this year sales of those phones have failed to keep pace with the Apple’s iPhone and Samsung’s Galaxy range.

Up to the second half of 2011, when it suffered a sharp decline in its fortunes, HTC, a former contract smartphone maker, had built a strong brand around the world with phones based on Android software.

HTC saw its profit more than halve in the second quarter from a year ago. It also warned of a revenue decline of as much as 23 percent in the third quarter from the previous three months due to macro softness and competition.

The smartphone maker is set to announce third-quarter results on Oct 5.

Additional reporting by Clare Jim in Taipei; Editing by Gunna Dickson and Muralikumar Anantharaman

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