HTC just unveiled the HTC Desire Eye, an unusual "selfie" phone equipped with the most powerful front-facing camera ever.
The 5.2-inch phone has two 13-megapixel cameras -- one on the front and one on the back -- and is powered by the same quad-core Snapdragon 801 processor and 2GB of RAM as the flagship One M8. However, the Desire Eye has a plastic body, instead of the M8's metal chassis, is waterproof in three feet of water, and comes in a wider variety of colors -- white, red, and blue.
Therefore, slapping "selfie" on products would be a natural marketing move, but is there any proof that calling a device a "selfie phone" will boost sales?
I seriously doubt it. Apple 's iPhone 6, which sold 10 million units in three days, has an underwhelming 1.2-megapixel front-facing camera. Its main rival, Samsung's Galaxy Note 4, has a 3.7-megapixel one. Together, Apple and Samsung control 37% of the world's smartphone market, according to IDC, and they did so without massive front-facing cameras.
But Microsoft , which only controls 2.5% of that market, believes in "selfie phones" as much as HTC. Microsoft recently promoted its new mid-range Lumia 735 as a selfie phone, highlighting its 5-megapixel front-facing camera with a wide-angle lens. Sony , another industry laggard which only controls 2% to 5% of the market, has also launched a selfie phone called the Xperia C3, which is also equipped with a wide-angle, 5-megapixel front-facing camera. The Lumia 735 will cost around $288, based on its European launch price, while the C3 costs around $300 in India.
It's fairly obvious that HTC, Microsoft, and Sony's sudden interest in selfie phones is a desperate attempt to get their devices noticed by piggybacking on a hot search term. But getting noticed in today's saturated smartphone market is really half the battle -- since the premium market is controlled by Apple and Samsung, while the mid to low-end market is being gobbled up by Chinese rivals like Xiaomi .
Understanding HTC's woes
If Microsoft and Sony's selfie phones fail, their core businesses will survive, since they are both well diversified beyond smartphones. HTC, on the other hand, relies completely on smartphone sales.
Over the past three years, HTC's market share in smartphones fell from 9.3% to 2.5%, according to Gartner. Competition from Samsung and Chinese competitors, poor marketing decisions, product delays, and several high profile executive departures all exacerbated that decline. Between fiscal 2011 and 2013, the company's annual revenue plunged 56% from NT$465.8 billion ($15.45 billion) to NT$203.4 billion ($6.75 billion).
Last quarter, HTC's revenue fell 11% year-over-year to NT$41.9 billion ($1.38 billion). On the bright side, its posted a profit of NT$640 million ($21 million) -- mainly due to cost-cutting measures and one-time gains -- topping Bloomberg analyst expectations of NT$501.6 million ($16.5 million).
A Foolish final thought
Since revenue growth is clearly HTC's main problem, the company is using a scattergun approach to find new sources of growth beyond smartphones. The company recently unveiled the Re action camera , will launch the Nexus 9 tablet this month, and plans to sell a smartwatch next year. Of these efforts, the Nexus 9 is the most promising, since its Google branding should help it sell better than the company's previous tablets, the Flyer and Jetstream.
The Nexus 9. Source: Google.
However, the Desire Eye won't move the needle when it comes to smartphone sales. It's too similar to the HTC One M8, costs more than the Lumia 735 and Xperia C3, and its only notable advantage over comparable devices is its 13-megapixel front camera. In my opinion, people like to take selfies -- but not enough to buy phones specifically designed for that purpose.
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The article Meet The HTC Desire Eye: The Ultimate "Selfie Phone" originally appeared on Fool.com.
Leo Sun owns shares of Apple. The Motley Fool recommends Apple. The Motley Fool owns shares of Apple and Microsoft. Try any of our Foolish newsletter services free for 30 days . We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy .
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