HTC Bets on Personal Cameras, Not Wearables

Don't Call It a GoPro Competitor: Marketer to Promote New Device as 'Lifestyle' Product

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The new Re camera from HTC
The new Re camera from HTC
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While its foes raced to the wrist, HTC was looking at the lens.

On Wednesday in New York, HTC introduced the Re, a periscope-like, mountable digital video camera. Re, a new product category for the Taiwanese phone and tablet marketer, works with any camera mounting hardware, the company said.

The tiny device can be mounted or handheld, HTC said. "We don't see many people want to walk around life with a GoPro on their heads," Jason Mackenzie, President, HTC America, said when announcing the product on Wednesday. "Re allows you to capture video and photos without getting in the way."

"Re was designed to be mobile," Mr. Mackenzie added. Accompanying software is compatible with both Android and iOS.

HTC also introduced image enhancing software, a video editing community tool and a fresh smartphone called Desire Eye, optimized for taking "selfie" photographs.

Of the top five U.S. smartphone vendors, HTC is the only one that has not released a wearable device such as a smartwatch. "We didn't see a point of going out there and doing a me-too product," said Erin McGee, VP-marketing for North America.

But executives did see the case for stepping outside the mobile box, as smartphone penetration peaks in developed markets.

HTC's share of the U.S. smartphone sales is also slipping -- it fell to 4.7% in the second quarter, according to ComScore, behind Apple, Samsung, LG and Motorola. Globally, the company is facing stiff competition from U.S. rivals and a rising wave of Chinese brands such as Lenovo, Huawei and Xiaomi.

With Re, however, HTC is hardly stepping into a void. The smartwatch field may lack a definitive leader, but the attachable camera market has GoPro. The manufacturer, which went public in June, has stormed the market. In recent weeks, GoPro has introduced new devices and compatibility with live-streaming mobile apps. According to IDC, GoPro held 42% of the "digital camcorder" segment in the second quarter, when it shipped 896,000 devices.

NPD Group slots GoPro in its "action camera" category, for hardware with rugged, waterproof designs. GoPro commands 93% of the market by dollar share there.

More critically, it has cornered branding in the industry. Analysts have struggled to define this emerging hardware category, said Christopher Chute, research VP at the IDC Global Imaging Research Practice. Some simply call it the "GoPro category."

HTC wants to avoid the comparison. "We don't look at it in the same category," Ms. McGee said of Re. Her company plans to position the device as a "lifestyle," quotidian product, not one for extreme-sports aficionados, as GoPro has. "It's not going to be something that you wear on your head," Ms. McGee. "It's not action-oriented. This is for the everyday consumer."

It's not an outlandish move. While GoPro dominates the attachable lens industry -- sometimes called "point-of-view" cameras -- it is ripe for a challenger. "Usually at this point, you have a second or third tier that's taking share from the leader," Mr. Chute said. "That really hasn't happened." GoPro's closest rival, per IDC, is Ion, a three-year old hardware company with 12% market share. Sony holds 8%.

That gives HTC punching room, particularly if it can make the most of its existing global operating and marketing infrastructure. "GoPro is still getting its feet wet in international channels," Mr. Chute said.

Re will arrive "in time for the holidays," the company said, on HTC.com and Amazon. In the U.S., it will retail for $199 at AT&T, T-Mobile and Best Buy.

If HTC can successfully undercut GoPro's prices, it could carve out market share, said Benjamin Arnold, an analyst with NPD. "The action camera market seems easier to penetrate than the wearables market right now," he said.

But it's a consumer market with a ceiling, Mr. Chute cautioned. Only 10 million units will be sold globally this year, according to IDC estimates, a plateau that likely deterred HTC's smartphone competitors. Action camera hardware also requires certain specifications, like wind noise resistance, that are critical to users and reviewers.

"Branding and marketing is different than the mobile category," Mr. Chute said.

To promote its device, HTC is following GoPro's approach of tapping social content created by users. Its goal is to create "more experiential, more consumer buzz-building activations," Ms. McGee said. The company has recruited Amy Marie Gaertner, a teenage social media sensation with over 3 million Vine followers, to tout its new camera.

Gary Oldman, the British thespian who appeared in recent HTC commercials on TV, will not be involved in the camera marketing.

Earlier this year, HTC, which works with Deutsch L.A. and social agency Swift in the U.S., began the "Ask the Internet" campaign for its flagship One M8 smartphone. Its upcoming marketing push will be a "more comprehensive approach," Ms. McGee said. The Desire Eye smartphone will retail exclusively with AT&T, which also carries the gimmicky Amazon Fire phone.

The new efforts come on the heels of a tumultuous period for HTC. CMO Ben Ho departed in July after less than two years on the job. (HTC Chairwoman Cher Wang is currently filling the role and searching for a replacement.) In a call to investors that month, the company's CFO warned the company would "probably streamline" marketing expenses.

In the second quarter, the company announced net income of NT$640 million ($21 million), beating expectations. But its revenue dropped, continuing a quarterly ritual that's been going on since 2011.