HTC Said to Plan Smartwatch Sneak Preview for Carriers

Photographer: Lam Yik Fei/Bloomberg

An HTC Corp. employee talks on the telephone inside one of the company's stores in Taipei. Close

An HTC Corp. employee talks on the telephone inside one of the company's stores in Taipei.

Close
Open
Photographer: Lam Yik Fei/Bloomberg

An HTC Corp. employee talks on the telephone inside one of the company's stores in Taipei.

HTC Corp. (2498), the Taiwanese smartphone maker struggling with sliding sales, plans to demonstrate the first of three wearable devices next week in Barcelona, according to a person with direct knowledge of the plans.

A smartwatch prototype based on Qualcomm Inc. (QCOM)’s Toq device will be previewed to carriers at the Mobile World Congress trade show, with no plans to unveil the device publicly, the person said, asking not to be identified because the details haven’t been released. HTC also is developing a watch using Google Inc. (GOOG)’s Now service and an electronic bracelet that plays music, though it may not demonstrate them, the person said.

Chairman Cher Wang is counting on new products, more marketing and better customer service to reverse two straight annual declines in revenue as Chinese competitors including Xiaomi Corp. sell smartphones for as low as $100. HTC, once the top seller of smartphones in the U.S., will compete with Samsung Electronics Co. (005930) and Sony Corp. (6758) in a wearable devices market that may triple to $30 billion by 2018.

Taoyuan, Taiwan-based HTC is preparing to release its first wearable device by Christmas and is working to resolve issues with the battery and display, Wang said in an interview this month. HTC hasn’t publicly disclosed which products it may sell.

HTC shares climbed 1.9 percent to close at NT$133.50 in Taipei, the highest in almost four weeks. The company declined to comment on the new products in an e-mailed response.

Samsung, Sony

Samsung in September released the Galaxy Gear watch that connects with its smartphones, joining Sony’s SmartWatch unveiled in 2012. The Suwon, South Korea-based company is planning a new device that will be an evolution of the Gear, Lee Young Hee, executive vice president of the company’s mobile business, said in a Jan. 6 interview.

Global sales of wearable devices, which include glasses, watches and medical products, were about $10 billion last year and are expected to triple by 2018, according to forecasts by researcher IHS.

HTC, which currently sells only smartphones, on Feb. 10 forecast a third consecutive quarterly operating loss as it lost share to LG Electronics Inc. (066570) and Lenovo Group Ltd. (992) amid product delays and a shrinking marketing budget.

“We took our eyes somewhat off the ball” in terms of product lineup, Chief Financial Officer and head of global sales Chang Chialin said in an interview in New York this month. The company will begin selling its first mid-end smartphone, for as low as $150, globally this year, Chang told reporters last week.

Qualcomm Chips

HTC’s first smartwatch will feature Qualcomm’s Mirasol display technology, Bluetooth connectivity and a music player, the person familiar said. The second watch, based on Google’s Now set of applications, will likely feature an active-matrix organic light-emitting diode, or AMOLED, screen, the person said.

HTC also is working on a smart wristband with a thin touch-screen display, music player and activity-tracking features, the person said. HTC has yet to decide if any of the devices will go into final production, the person said.

Qualcomm, the world’s largest maker of chips for mobile phones, unveiled its Toq connected wristwatch in September as a means of showing developers the components it can offer for use in wearable devices. Those watches are available for sale on San Diego-based Qualcomm’s website for $349.99.

To contact the reporter on this story: Tim Culpan in Taipei at tculpan1@bloomberg.net

To contact the editor responsible for this story: Michael Tighe at mtighe4@bloomberg.net

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.