HTC slashes prices amid 'bleak prospects' with U.S. carriers

HTC phone
Like many of its rivals, HTC is struggling to compete in a worldwide smartphone market that has largely plateaued.

HTC is slashing handset prices this week as its presence continues to wane among U.S. wireless carriers.

The Taiwan-based company took to Twitter to announce a $150 price cut on the HTC U Ultra, dropping the cost from $749 to $599. The move is noteworthy because HTC’s high-end phone just came to market in the U.S. last month—so HTC is likely trying to boost disappointing sales.

The vendor has also cut prices on several other handsets and accessories. And HTC’s offerings aren’t attracting much attention from major operators in the U.S., according to a new report from Wave7 Research.

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“HTC has bleak prospects, given lack of availability from T-Mobile and AT&T and weak prepaid availability, while the OEM has (a) tiny share of 2% at Sprint and <1% at Verizon,” Wave7’s Jeff Moore observed in a note to subscribers.

HTC said earlier this year that it plans to streamline its handset portfolio in the coming months, dropping entry-level, low-margin phones from its lineup in favor of mid-range and high-end devices. That news followed yet another tough earnings report from HTC, in which it posted an operating loss of $117 million and a 13% year-over-year drop in revenue.

Like many of its rivals, HTC is struggling to compete in a worldwide smartphone market that has largely plateaued. The company reportedly laid off workers in Seattle in November as part of a larger corporate restructuring, and T-Mobile quietly dropped the HTC 10 from its portfolio just weeks after the flagship handset hit the market.

Cliff Maldonado, an analyst at BayStreet Research, said in December that HTC likely won’t release another flagship in the U.S. this year, opting instead to design devices for specific customers who in turn sell them to consumers.

“We believe the launch of the Pixel at Verizon and the Bolt at Sprint, combined with the recent headcount reductions, indicate HTC will follow more of an ODM business model going forward,” Maldonado wrote in a report. “We believe HTC has astutely restructured to compete with their hardware design strengths and partner with brands to lower marketing and distribution costs and overall risks. It will be interesting to see how and with whom HTC partners with next.”

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