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HTC launches smartphone with revamped software to take on Samsung

Guests use a sample phone at the launch of the HTC One smartphone in London February 19, 2013. REUTERS/Toby Melville
Guests use a sample phone at the launch of the HTC One smartphone in London February 19, 2013. REUTERS/Toby Melville

By Paul Sandle and Clare Jim

LONDON/TAIPEI (Reuters) - Taiwan's HTC Corp has unveiled the new smartphone that it hopes will set it apart from the crowd of Google Android devices on the market and help it make up ground lost to Samsung Electronics Co Ltd and Apple Inc.

It has distinguished the phone, the HTC One, from rival Android devices by using new software - the BlinkFeed feature - to replace icons on the home screen with a personalized stream of news articles, social networking updates, photos and video.

HTC is also billing it as the first smartphone with a built-in remote control function, opening a window into a potential new business model for phone vendors and cable TV operators.

HTC is in discussions with cable operators in different countries, and hopes to offer a more interactive package for consumers by transforming the phone into a remote control for TVs, set-top boxes and receivers, according to analysts who attended a conference with HTC on Tuesday. The company declined to comment on whether it was in talks.

"The new TV connectivity feature inspires new imagination regarding how the smartphone and TV space may evolve," said CK Lu, an analyst for Gartner based in Taipei. "It allows for deep collaboration," he said.

Possibilities include co-developing apps and bundle-selling by smartphone makers and cable operators, Lu said, which would expand sales channels.

HTC was an early, and successful, maker of smartphones based on Android, but it has been eclipsed by the increasing dominance of Samsung, which Gartner said made more than 42 percent of Android smartphones in the fourth quarter.

Android is widening its lead in smartphone operating systems, with devices running the software capturing nearly 70 percent of the market last quarter, Gartner said last week.

Apple is in second place with 21 percent, while Blackberry and Windows Phone, which Nokia is pinning its hopes on, trailed with 3.5 percent and 3 percent, respectively.

HTC, however, has failed to capitalize on Android's dominance. Its share of mobile phone sales fell to 1.8 percent of the market last year, down from 2.4 percent in 2011, according to Gartner, and delivered disappointing first-quarter sales guidance early this month after reporting a 91 percent plunge in fourth-quarter net profit.

HTC launched its new device, which features a 4.7 inch screen and quad-core processor, days before the mobile phone industry's biggest gathering in Barcelona.

Analysts said that the new smartphone would help HTC to differentiate its brand from the typical Android offering but that competition from Samsung remained the biggest threat.

"HTC One is the best Android smartphone for the time being, but consumers will wait till they see Galaxy 4S, which is expected to launch in mid-March, to decide to buy or not," said Birdy Lu, an analyst at Daiwa Capital in Taipei.

HTC said the device would be available in more than 80 countries from March.

Shares of HTC closed down 1.6 percent on Wednesday in Taiwan, versus a 9 percent rise in the broader market

(Editing by David Goodman and Chris Gallagher)

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