The Same Old Bad Habits Are Fueling HTC’s Slow Decline
We say it so often on the Pocketnow Weekly podcast that it’s become something of a cliché: we really, really want HTC to succeed.
The company has been at the forefront of our technology consciousness for only a few years in its current incarnation, but long before it was “HTC,” it built devices as an ODM for other corporations. Devices like the PPC-6700, my first true PocketPC. Devices like the Treo Pro, which helped Palm survive its leap to a new platform (albeit briefly). And since striking out on its own, the company has altered the landscape with game-changing devices like the G1, the Hero, and original Evo 4G. It’s also brought us one of the most compelling mobile ad campaigns of all time with its “You” commercials, and we called its One X one of the most beautiful smartphones we’d ever handled in our review.
Some combination of these factors, combined with our natural tendency to root for the underdog, fuels our desire to see HTC return to its glory days. But the company isn’t making it easy, with its latest financials showing a 79 percent drop in third-quarter net profits.
The fourth quarter, as always, will tell its own special tale, and we’ll have to wait a few months to see whether holiday buying has a significant positive impact on the company’s bottom line. We’ve already shared our thoughts on the three big steps HTC should take to reclaim its faded glory: in addition to a brand revitalization and another attempt at tablets, we suggested that HTC’s strategy with the One line could work, given enough time and advertising support.
Obviously the latter half of that equation hasn’t come to pass. In a vacuum, HTC’s advertising campaign for the One series could perhaps charitably be called “unambitious.” Juxtaposed against Samsung’s massive marketing onslaught, though, HTC’s efforts look positively anemic. When every bus, banner, billboard and bench in a a city features a Samsung Galaxy S III advertisement, backed up by constant and memorable (if needlessly inflammatory) TV commercials, the occasional 30-second HTC spot featuring a skydiver taking photos with his One X just doesn’t cut it.
More concerning is HTC’s recent string of product announcements. The company already committed a tactical blunder by unveiling its One X flagship early in the year and failing to capitalize on its lead time before the Galaxy S III’s arrival. Now, it seems the company intends to devote the rest of 2012 to rolling out a midrange gap-filler, a near-identical One X refresh, and a superphone that’s so far only available in Japan.
There’s nothing wrong with any of these devices in and of themselves. We really like what the HTC One VX offers, considering it’s a midrange device. The One X+ is a sensible approach to keeping the space-age design of the One X up-to-date on the inside. The Butterfly J compensates for its bizarre moniker with oversized specs and scale, and it stands a real chance of making a splash in the US as Verizon’s DLX … if it ever gets here.
We can’t come down too harshly on HTC for its seemingly glacial product release pace. In reality, we shouldn’t reasonably expect a true One X sequel until next spring, given the typical one-year smartphone product cycle. The time between just feels longer in this case, because of how soundly the company is being whipped by its rival Samsung, in everything from market share to mind share to profits. That’s a pattern that looks about to be repeated in the 5-inch-and-larger space with the Galaxy Note II, a device and product category Samsung seems intent on forcing into mainstream acceptance. While HTC’s Butterfly/DLX isn’t necessarily a phablet, it’s the closest thing the company has to one … and it’s not even here yet. Moreover, no one outside of tech circles knows it’s coming.
HTC and Microsoft devotees alike might find some hope in the company’s new Windows Phone line, the lone pleasant surprise to come from HTC since the spring. Indeed, the devices look wonderful, particularly the 8X we recently unboxed, and we’re glad to see HTC expanding its presence onto Microsoft’s platform in a significant way. Executed properly, the Windows Phone push might afford HTC the opportunity to excel in a non-Android environment. But even if it does, it will be doing so in a segment that currently accounts for less than 4% of the market. And at the risk of repeating myself: HTC won’t excel if no one knows the phones are out there, because there’s little or no advertising.
It doesn’t take a tech writer to point out that if HTC’s late-2012 devices -midrange and deluxe, Android and Windows Phone alike- aren’t advertised well, they won’t sell. So why aren’t we seeing ads that are better, bigger, in greater numbers, in more places? Why aren’t we seeing HTC try?
In short, our advice hasn’t changed. We’re not saying it’s easy: HTC is weathering a brutal storm right now, hand-delivered by its mammoth South Korean adversary. That it hasn’t completely caved under the pressure is testament not only to the fact that HTC offers solid products, but that it knows it does. Even in the face of serious challenges, HTC evinces a great combination of determination, self-awareness, and the confidence that comes from making great smartphones. Those attributes alone won’t be enough to bail it out this year, but they might be sufficient to set it up for success in 2013 — provided the company remembers how to tell people it exists.