[One (M7) General] BarryH_GEG:
Which conversation are you guys having? A discussion about "smartphones" or "high-end smartphones?" Because they are different.

Here are smartphone sales projections from 2013-2017. Japan, the UK, and the U.S., three mature markets, show the least amount of growth. Emerging markets are where the opportunity is. In emerging markets low-end smartphones are the vast majority of what's sold. 30% of the smartphones sold in India last year were $100-130; only 2% were over $400. I'm sure China's the same way. Samsung's recent stock fall was caused by analysts reforecasting the market for high-end smartphones downward because of market maturity in places like the US, Japan, and the EU. And the concern isn't sales volume, it's the impact on profit because there's less margin in lower-end devices. Samsung's expected to sell 330MM mobile devices in 2013. Only 60MM (18%) of them are SGS4's. But the SGS4's probably responsible for 1/3 of their profit (WAG). The same thing applies to HTC and other device manufacturers.

On the subject of emerging markets, HTC's late entry leaves them vulnerable. Just this past quarter Samsung became the largest selling manufacturer in China.

As well as Samsung and Apple, HTC faces pressure from the Chinese giants Huawei and ZTE, which are both ramping up their plans to become major consumer brands. Despite this, HTC said it will target the lower end of the market in China. Chief Financial Officer Chang Chia-Lin said HTC, which has tended to rely on developed markets for most of its revenue and in China has focused on mid- to high-end models, was now ready to offer smartphones priced less than 1,999 yuan (about £200/$308) - currently its cheapest phone in China. "We're going to go down, but not below 1,000 (£106/$163) ," he said. "We see there's still room to play" in 1,000 to 2,000 yuan phones. Samsung recently warned that the growth of the smartphone market in the West was slowing down and that it too was looking to the developing world. Apple is meanwhile still rumored to be preparing a lower-cost version of the iPhone for China.​

http://www.telegraph.co.uk/technolo.../HTC-turns-to-China-as-decline-continues.html

HTC Corp. maintained a 3.1 percent share of the global smartphone market in the first quarter, as its share gains in North America were offset by losses in other regions, according to U.S. brokerage Morgan Stanley. The brokerage firm said HTC's market share rose slightly to 4.2 percent in the quarter in North America from 3.5 percent in the fourth quarter of last year, thanks to the launch of the 5-inch HTC Droid DNA phone, which went on sale in November through U.S. carrier Verizon Wireless. But the company was not able to drive up its global market share, given ongoing share losses in the European, the Middle East and African (EMEA) markets and slow progress in the Asia-Pacific region -- especially in China, Morgan Stanley said in a report dated May 3. The report detailed how HTC's market share in the EMEA markets fell to 3.7 percent from 4.2 percent in the fourth quarter, with market share in the Asia-Pacific region shrinking to 2.7 percent from 3 percent. Meanwhile, the top four Chinese handset makers (Huawei Technologies Co., ZTE Corp., Lenovo Group Ltd. and Coolpad) increased their share to 28 percent in the first quarter, compared with 21 percent in the same period of 2012, at the expense of international brands including Apple Inc., Morgan Stanley analysts said.​

http://focustaiwan.tw/news/aall/201305050014.aspx

But staying competitive is increasingly difficult as the field has become crowded with competitors, including lower-price Chinese rivals. HTC's global smartphone market share fell to 2.5% in the first quarter of this year from 9.3% in first quarter of 2011, according to market-research firm Gartner.​

http://online.wsj.com/article/SB10001424127887323836504578553051806977448.html

“We expect HTC shipments to peak in May, stay at a similar level in June and start to decline in July,” Citigroup Global Markets Inc analyst Kevin Chang (張凱偉) said in a note on Wednesday. Chang’s forecast came after HTC on Tuesday reported its consolidated revenue for last month increased to NT$29 billion (US$969.4 million), up 48.03 percent from April, thanks to better-than-expected sales of its flagship HTC One smartphone. “We estimate that HTC One accounted for around half of HTC’s May sales,” Chang said, adding that the company might have shipped around 1.2 million units of the phone last month, up 100 percent from April. Citigroup originally forecast HTC would ship only 1 million HTC Ones last month before ramping it up further this month. Chang said he revised his shipment forecast upward because HTC’s component yield rate had improved faster than expected, which in turn had enabled it to push some shipments to last month from this month. However, “with One volume peaking and other models still weak, we believe May will be the peak of near-term sales,” he said in the note. HTC may experience a similar scenario as last year, when sales also peaked in May and June, he added. The Taoyuan-based company could also face headwinds from the generally slow market demand in the high-end smartphone segment, according to Citigroup. Chang attributed the slow demand to a combination of saturation in developed markets and demand being delayed to next year as consumers wait for the launch of the big-screen iPhone.​

http://www.taipeitimes.com/News/biz/archives/2013/06/07/2003564143

So the One being "number three" is likely in a lot of mature markets and hopefully will help HTC's profitability. But there's little demand for devices like the One (or SGS4) in emerging markets which isn't going to help their sales. But HTC's lack of penetration and having fewer low to mid-range phones to offer in those markets is going to hurt them overall.