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HTC Places Publicity Over Profits With Cryptocurrency Mining Function On Exodus Smartphone

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Taiwanese smartphone maker HTC’s Exodus 1 model turned heads in 2018—it was a blockchain-focused phone designed for cryptocurrency trading. But the HTC device was too niche despite all the buzz about digital currencies and wasn’t expected to lift the Taiwanese tech company’s struggling handset portfolio against Android titans like Samsung.

This month, HTC added to its Exodus line a crypto-mining function to let users validate transactions on a 270-plus GB blockchain.

HTC designed the Exodus at first as a handset to let users keep data and cryptocurrency assets private and secure on a device rather than in the cloud where it can be seen. This time, people can let their handsets mine cryptocurrency, meaning adding cryptocurrency transactions to the public blockchain ledger and try to be the first to authenticate those trades in exchange for a bit of digital cash. That’s normally the job of a strong PC.

It’s still niche, tech analysts caution, meaning it won’t be a big revenue driver. But the phone stands to change crypto mining if it sparks a trend among smartphone developers. An HTC spokesperson points to “an important breakthrough for the crypto community” created by the Exodus handsets. “We are constantly looking to innovate and bring what is best for the crypto community and blockchain ecosystems into smartphones and other devices,” the spokesperson says.

Even if HTC doesn’t set a smartphone industry trend, it should get a publicity boost for innovation, some analysts say. “HTC is trying to democratize mobile crypto mining [by] making it cheaper and more accessible,” says Neil Mawston, executive director of wireless device strategies with Strategy Analytics. “We applaud HTC for at least giving it a go. If Apple launched an iPhone that could mine cryptos, the mobile finance industry would be talking about a revolution.”

The Exodus 1s was launched in October last year and goes for 5,990 New Taiwan dollar (about $199). It runs on a Snapdragon 435 processor, Android Oreo 8.1 and 64GB of storage. HTC decided this month to add the app DeMiner by Taiwanese design firm Midas Labs to let phone users mine Monero cryptocurrency.

The DeMiner app allows an Exodus phone to perform in some ways like a stronger desktop even on less power, the HTC spokesperson says. “This enables mobile devices to be suitable for cryptocurrency mining in a plugged-in state for the first time,” the spokesperson says.

Samsung, Sirin Labs and other smartphone makers were “flirting with crypto” over the past few years, says Bryan Ma, vice president of client devices research covering mobile phones at IDC. They focused on currency wallets rather than mining, he says. That makes HTC an outlier.

And the Taiwanese company might not mind playing to a niche market, analysts suggest. It’s clear mining isn’t for the masses and Strategy Analytics estimates that less than one-tenth of a percent of the world’s adult population actively mine cryptocurrencies today on any sort of device. HTC is unlikely to see “major revenue uplift” from its new cryptophone hardware, software or apps, Mawston says.

It’s looking to lift its image instead, some analysts suggest. “HTC is probably banking on the novelty of it all, hoping to project an image of being an innovator, all while riding whatever fanfare there is around cryptocurrency,” says Ma.

HTC has expanded its virtual reality headgear over the past few years while releasing fewer flagship handsets overall. Its smartphone market share has fallen since a 10.7% peak in 2011 as rival Android handset developers crowded it off the shelves and consumers cut back on handset purchases overall in 2018 and 2019. IDC placed its global market share at less than 1% in 2019.

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