HTC’s Touch Diamond: Sprint Nextel adds to its high-end offerings

The growing consumer embrace of smartphones – and the willingness to pay for heavily subsidized gadgets and data plans that promise fun and functionality – faces uncharted territory this holiday season.
But plans for this quarter were hatched a year or more ago, as handset-and-service integration and manufacturing requires about a year to bake thoroughly. Carriers and their vendor partners must soldier on despite the chilly headwinds they face.
Enter the much-anticipated Touch Diamond device by HTC Corp., which integrates myriad services from Sprint Nextel Corp. (The device also launches at Alltel Communications L.L.C.) The device launched last month at Sprint Nextel for $250 with a $100 mail-in rebate and two-year service contract.
The carrier and the vendor took time to position the device so that it doesn’t go head-to-head with either Apple Inc.’s iPhone or Research In Motion Ltd.’s bevy of BlackBerrys, according to Trevor Van Norman, a senior manager for product marketing at Sprint Nextel.
“We’re looking at work-and-play,” Van Norman said. “iPhone is all play. RIM is all work. We built Sprint’s entertainment and services options into the Touch Diamond, on top of Windows Mobile 6.1, which is a big hook for the enterprise. We think this device could fit in the boardroom or the nightclub.”
(Norman, of course, acknowledged that Apple and RIM have made strides in their attempts at market cross-over.)
That integration meant that HTC’s patented TouchFlo technology rides on top of Microsoft Corp.’s Windows Mobile 6.1 to give users the choice of touchscreen-activated tiles at the bottom of the customizable homescreen for ease-of-use with “Sprint One Click,” Java-based applications, or a deep-dive into Windows Mobile’s productivity offerings. The VGA-quality, touchscreen display is in keeping with the new emphasis on high-resolution, touch displays. It’s one touch to get to the most-viewed video moments on YouTube, for instance.
“It’s ‘thumb-able,'” said HTC spokesman Keith Nowak, who HTC just wooed from Nokia Corp’s U.S. operations.
The Opera browser on the Touch Diamond is “about moving to better browsers,” Van Norman said. “That’s a key data strategy. We’re putting that into play now.”
The Touch Diamond makes available Sprint TV, Sprint Music Store, is GPS-enabled and packs a 3.2 megapixel camera and camcorder.
On design, the Diamond got its name from a faceted backplate on GSM models in Europe, while the slightly bulkier CDMA version going to Sprint Nextel accommodates the latter’s radio-frequency technology, Van Norman said. (An analyst said the CDMA design met battery and processor requirements.)
Noting that a $250 price tag puts the HTC device at the high end of Sprint Nextel’s portfolio and the general market – with smartphones on the market ranging from less than $100 to $300 – Van Norman hinted that the carrier had a little leeway to spark sales this season with “some movement in price points.”
From HTC’s perspective, the Sprint Nextel partnership in this case provided a much-desired logo on the front plate, in keeping with the Taiwanese vendor’s plan to build a brand in the West.
Asked about the intended demographic for the Touch Diamond, HTC’s Nowak said that “early adopters will flock.” And new smartphone users, perhaps upgrading from their feature phone, may be willing to pay a bit more for the TouchFlo interface’s ease-of-use.
WinMo’s influence placed some limits on that TouchFlo-based customization effort, both Nowak and Van Norman acknowledged.
“You’re dealt the OS,” Van Norman said. “6.1 was a jump ahead when released. Microsoft knows what it has to do and it’s moving in the right direction. Meanwhile, TouchFlo has made the user interface more aesthetically pleasing and navigable.”
In fact, HTC’s TouchFlo layer for touchscreen devices is the Taiwanese vendor’s foot in the door of the future, when considered in the context of market projections from ABI Research. The latter found that consumers seek intuitive user interfaces and personalization options and that shipments of touchscreen products in 2007 were 91% higher than the prior year.
Whether this leads to robust sales of the device, of course, is questioned by some analysts.
“TouchFlo 3D includes incredibly rich animations and it is the most attractive user interface on any device currently shipping, including Apple’s iPhone 3G,” wrote analyst Avi Greengart at Current Analysis in a report on the Touch Diamond last month. “Unfortunately, in our tests, we often found it frustrating to use, as it often misinterprets ‘swipes’ (of the finger on the touchscreen) with ‘selection.'”
(This criticism was echoed by Katherine Boehret at the Wall Street Journal.)
Further, Greengart wrote, the device’s functionality “certainly justifies the price point, but the competition will not allow it.” The analyst cited the $200 3G iPhone at AT&T Mobility, the G1 at T-Mobile USA Inc. at $180 (and $150 or less at Wal-Mart). He even cited HTC’s own Touch Diamond Pro device, due soon at Sprint Nextel for $300.
Fortunately for Sprint Nextel and HTC, however, it is the consumer – buffeted by the same head winds – who will decide on whether the Touch Diamond is a hit and a lure that Sprint Nextel can use to keep its subscribers faithful.