20 July 2019
HTC seems to believe that blockchain technology and decentralized app ecosystem can be a game-changer for the smartphone maker. Photo: Bloomberg
HTC seems to believe that blockchain technology and decentralized app ecosystem can be a game-changer for the smartphone maker. Photo: Bloomberg

Can a blockchain-powered phone help HTC out of the woods?

HTC is no longer among the top players in global smartphone shipments, but that doesn’t mean the company has halted innovation. Last year, the Taiwan firm launched the U11 device that bore a new “Edge Sense” feature that allowed users to get the phone to perform a variety of tasks by squeezing the sides of the device.

After that industry-first initiative, HTC is now looking to shake things up with what appears to be a more meaningful endeavor.

The company has signaled that it is making good progress on plans to launch a blockchain-powered phone, betting the technology can help it disrupt the status quo in the smartphone sector as the world prepares for 5G.

On Wednesday, HTC made several announcements related to blockchain technology deployment. A handset, dubbed Exodus, which incorporates blockchain is on track for launch this year, possibly in the third quarter, according to company officials. 

In contrast to other smartphones, the new product — which was first announced in May — would be designed for decentralized applications using blockchain, the distributed-ledger technology that has powered the rise of cryptocurrencies, among other things. 

The company also said CryptoKitties, which as been touted as the world’s biggest game to be built on blockchain technology, will come to HTC devices starting with the HTC U12 Plus.

According to HTC, CryptoKitties, which lets users collect and even “sire” unique virtual cats, would be the first of a broader app store based on games developed through blockchain technology.

The Taiwan firm aims to build up an ecosystem of blockchain-based applications in the future.

As for the Exodus phone, HTC says it has started accepting pre-orders for the blockchain handset in the US market and that demand has been very good. The device will be the world’s first phone dedicated to decentralized applications and security.

Saying that it will make decentralization a reality, HTC bragged in a corporate web post that “we believe we can help reshape the internet with the HTC Exodus.”

It’s “all about decentralized internet, apps and the ability to hold your data on the device instead of in the cloud,” as tech news website Engadget reported.

There’s a lot at stake for HTC, given its weak sales and financial troubles that prompted the firm to announce a big round of layoffs recently in its Taiwan manufacturing operations.

Analysts will be wondering whether the blockchain plan can generate enough sales and help save HTC’s smartphone business. In the first quarter this year, HTC shipped only 630,000 smartphones, according to IDC, compared with more than 2 million devices in same periods in previous years.

As of now, there are no details on how exactly HTC hopes to “reshape the Internet” or boost its financial prospects through the latest investment projects.

Meanwhile, there is also a question as to whether it is the right time for HTC to make crypto-related bets, as investor sentiment for virtual currencies has cooled and authorities around the world are seeking to tighten regulations.

HTC believes the new phone with a cryptocurrency wallet will be “the most secure hardware wallet out there.”

A company official told The Verge that launch of virtual cat games can encourage gamers and people who are less familiar with cryptocurrency to try out the Exodus phone, pointing out that “gaming is the most approachable thing on mobile, for the non-crypto crowd.”

The Taiwan smartphone maker has set an ambitious target, envisaging that 30 million people with bitcoin wallets will use Exodus to access and manage their coins.

Achieving the goal, however, is another matter.

Given the company’s dismal sales recently, it would indeed be a miracle if HTC manages to sell 30 million Exodus phones to bitcoin users.

According to its official web page, Exodus’ selling points include trusted hardware, multiple protocols with the intent of interoperability between blockchains, and bringing decentralized apps to mobile.

Making every phone a node of Ethereum and bitcoin for true decentralization, the handset will have a universal wallet and trusted and user-friendly user interface. All user identity and data will be stored on the phone, rather than in the cloud.

As things stand now, it is quite difficult to predict whether Exodus will prove to be the success that HTC is hoping for.

As for the idea of “reshaping the Internet”, one can only say that it is not something that can be done by HTC alone.

The popularity of blockchain in mass-market will depend on how tech behemoths such as Google, Amazon and Facebook will participate and carry forward this round of Internet revolution.

For HTC to suggest that it can do it on its own is a bit much, to say the least.

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EJ Insight writer

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