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HTC and LG, Former Smartphone Leaders, Struggle to Get Out of Samsung's Shadow

The struggling Taiwanese phone maker says the HTC 10 offers a fresh design and improved camera, while Korea's LG is trying to convince developers to build add-ons for its G5.

Ina Fried/Recode

In a global smartphone market dominated by Samsung and Apple, it has been difficult for rivals — including two former big-name phone players, Taiwan’s HTC and Korean electronics giant LG — that want to compete on the global stage.

HTC, a once-storied and market-leading brand, has stumbled badly. Stung for sticking with a very similar design the past three years, the Taiwanese company is hoping to chart a new course when it introduces its HTC 10 flagship phone on Tuesday.

“We know that our flagship needed to be better than last year’s,” said HTC associate VP Nigel Newby-House, associate VP of product planning for HTC Americas, in an interview last week. “We just weren’t bold enough.”

Meanwhile, LG has made a bold but risky move of its own. The chief selling point for this year’s G5 flagship phone is a modular design that depends on interesting accessories that attach to the device. The company has come out with a few accessories of its own, including a 360-degree camera, a robot and virtual-reality goggles. This Friday, the company is meeting with developers in San Francisco to persuade them that they, too, should build add-ons for the G5.

Knowing that it is making a big ask, LG isn’t seeking exclusivity, just that any accessories or apps require minimal setup to work with LG’s hardware. After all, even LG’s own 360-degree camera will work with other phones.

“As long as they marry with us, they can cheat,” joked Ramchan Woo, the LG vice president in charge of the company’s phone product planning.

HTC, on the other hand, is just now showing its answer to Samsung’s Galaxy S7 and the LG G5. The HTC 10 aims to address key criticisms of last year’s HTC One M9, including both its tired looks and comparatively weak camera, seen by many as a step backward from even the company’s own prior models.

Although HTC has attempted to diversify by selling other kinds of hardware, its success still hinges on its ability to profitably sell phones, something it has struggled to do for a number of years.

The HTC 10 borrows its fingerprint sensor and some design cues from last year’s A9 model, but is not the iPhone look-alike that phone was.

But even with a fresh look and improved camera, it’s hard to see how this will be enough for HTC to regain lost ground in the smartphone market.

And there is one key area where HTC is guaranteed to come up short: The marketing budget.

Samsung and Apple spend gazillions to tout their latest models, while HTC has relied largely on its brand name and word-of-mouth, both of which have suffered over the last couple years, as have the company’s finances and market share.

Newby-House acknowledges that there is no world-beating innovation in this year’s HTC model, but argues that improvements in performance and audio add up to a more competitive phone. On the camera front, HTC says the phone’s 12-megapixel camera has larger pixels than the iPhone, and optical image stabilization on both front and rear cameras. If you don’t like the standard rows of app icons, the M10 offers a fresh take on the home screen, where users can choose a theme instead, and launch apps from different parts of a main image.

The price is typical fare for a high-end smartphone. In the U.S., the HTC 10 will sell unlocked for $699, with carriers likely to offer their own financing options. While the HTC 10 will ship in the U.S. and other key markets with Qualcomm’s top-of-the-line Snapdragon 820, it will have a lower-end Snapdragon 652 in some Eastern European and Asian markets.

LG faces a marketing challenge, as well, but is counting on some developers to be intrigued by the creative possibilities that are opened up by the G5’s design. It hopes to further entice them with a website dedicated for showcasing and selling the add-ons that developers create.

As for early sales of the phone, LG’s Woo said that demand is higher than expected, both for the phones and for the LG-made “friends”; he declined to give specifics.

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