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Struggling Smartphone Maker HTC Expects Income Boost From Its 'World First' 5G Hub

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Smartphone developer HTC's market share fell from a peak in 2011 to about 1% last year, per tech research firm IDC data. The Taiwanese company has struggled to compete in recent years with other Android handset makers on marketing, sales channels and specs. It lost money in 2017 and profited last year only after letting Google buy part of its staff. But now a unique piece of hardware for 5G mobile users stands to give HTC at least a short-term income boost.

HTC is selling its 5G Hub devices for small groups of mobile users to stream videos or play games at top speeds without hiccups. The hubs were due to start selling last month for $600 apiece in the United States. U.S. mobile carrier Sprint is promoting the hubs. They're also selling in Australia, where telecom operator Telstra made the hubs available last month.

“HTC is currently the world leader in 5G hub devices,” says Neil Mawston, executive director of wireless practice with Strategy Analytics in the United Kingdom. The gear could add $50 million-$100 million to HTC’s revenues this year, he says. He anticipates a few hundred thousand hubs will sell worldwide.

Almost a totally new kind of device

The device compares in tech terms to MiFis, which are portable broadband tools for multiple 3G or 4G users. 5G is faster than both earlier generations, though hardly universal yet.

An owner of the portable HTC device could set it up at home for a dozen other people to play complex games including ones based on virtual reality. It can access Android apps, as well, a feature that earlier devices lacked. The hub in theory offers a signal that’s more stable than what telecom companies would provide.

At HTC, “they position it as a connectivity node for the home or office, a la WiFi router, but also something that can be taken on the move to provide an individual employee 5G signal access akin to a MiFi device,” says Jason Leigh, an IDC research manager for mobility.

More on Forbes: Why 5G Isn’t Just 4G Faster

HTC declined to comment for this report, but its website calls the 5G Hub a technological world first.

Given the hub's likely appeal among people who play advanced games at high speeds, HTC may expect the devices to stoke sales of its Vive-brand virtual reality (VR) headsets for gamers, says Tzeng Chiau-ling, a senior industry analyst with the Taipei-based Market Intelligence & Consulting Institute. The fast-growing global gaming market will be worth $148.1 million this year, market research firm NewZoo says.

“Key selling points of HTC’s 5G hubs will likely focus on its more stable connection with VR head-mounted devices at home in addition to much faster data download and upload speeds and wider coverage,” Tzeng says. “The role of HTC 5G hubs will be to help its VR applications evolve further.”

Short-term income boost for HTC

The 5G hub’s contribution to revenue, however, won’t last long or leave it a tower or money, tech analysts say.

Its price will limit the number of sales, likewise a lack of appeal to the mass, non-gaming market, Mawston says. A hub user also would need to join a relatively high 5G data plan to make the device work, adding to the real price.

Adding complications, pickup of 5G in the United States is “extremely limited,” Leigh says. Sprint has launched it in just nine parts of the country. “For many consumers, at least in the U.S. market, faster streaming isn’t enough to overcome the premium prices of both 5G devices and service plans,” Leigh says. “Other than video streaming and gaming, the industry is still struggling with a compelling use case for 5G adoption in the home, which is where the market for the gub would most likely reside.”

HTC could easily lose whatever lead it takes in today’s market as competitors move in, Tzeng says. Network communications equipment brands such as Netgear, Huawei and Inseego have made 5G-enabled equipment already, so their “entry barriers to 5G hubs featuring screen- or voice-controlled technology are not high,” she says.

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