How can HTC stem the bleeding?
HTC has been battling waning market share and revenue for the better part of two years now. The fact that the company is in financial turmoil (and recently played an executive shuffle in its US offices) comes as no surprise.
In fact, HTC isn’t the only mobile manufacturer in trouble. Practically every mobile handset maker – with the exception of Samsung and Apple – have a long, rocky road ahead. It seems no combination of specs, hardware, or price can even begin to take from the likes of the two current mobile behemoths. Apple and Samsung have near perfect formulas for success, and few appear to have the capacity to replicate it.
Of late, HTC has taken the brunt of the blow.
Following the launch of its do or die smartphone, the One, HTC was expecting a sales and market share boost. Yet those sort of numbers continue to slip.
Last year, due in large part to the DROID DNA, HTC saw its global market share rise to 4.2 percent in Q4 from 3.2 percent the previous quarter. But its market share once again dipped to 3.1 percent in Q1 2013. And its financial reports tell a similar roller coaster story. HTC posted an 11-month high in revenue for May, 48 percent growth over April, which was also a good month for the company. But the quarter results are much more bleak – revenue and profits are down more than 26 and 83 percent, respectively, from the same quarter last year. In other words, despite the relatively successful launch and positive reviews of the HTC One, the company continues to spiral out of control.
So how does it stop? How does HTC stem the bleeding and begin to work towards growth in revenue, profits, mind share, and market share?
It would be naive to believe any one phone will do the trick. The HTC One is already a fantastic device, and many believed this would be the phone to put HTC back on the map. But the One, like many HTC smartphones over the years, comes with its fair share of compromises.
HTC can build fantastic hardware. It’s a bold company that isn’t afraid to work against the grain – the UltraPixel camera, for example. And, after a few missteps, HTC is beginning to create much better software.
At the end of the day, however, the company only has one truly unique trick up its sleeve. Nokia is relentlessly working the image sensing angle; Motorola is notorious for enormous batteries (MAXX); Samsung offers an arsenal of varying sizes and specifications; and Apple offers a reliable smartphone that’s above par in practically every category. HTC knows how to build great hardware, but the only thing that makes the One stand out in the vast sea of smartphones is BoomSound – the company’s tight relationship with Beats and dual-front-facing speakers.
“But, Taylor! HTC uses some of the best displays … ever!” True. But which phones offer the total package? Which smartphones will you suggest to your father, grandmother, sister, or uncle? Are you going to offer the smartphone with a great display, metal chassis and font-facing speakers? Or a phone that offers the total package?
HTC makes some great smartphones – few will argue with that. But practically every device it makes comes with a subset of compromises – integrated batteries, fixed storage, availability (though it’s less of an issue these days), and often camera quality.
It’s safe to say, HTC needs to broaden its scope and truly get behind its products … for the long haul.
It doesn’t matter if replaceable batteries are a poor solution to the seemingly never-ending battery life issues. It doesn’t matter that removable storage isn’t fully supported by Android anymore. It doesn’t matter that the 4-megapixel camera on the HTC can take comparable (albeit smaller) pictures to other 8- and 13-megapixel cameras on other smartphones. General consumers – the vast majority of smartphone buyers – could not care less. They want a phone that works, a phone that does it all.
There’s a reason the Galaxy S 4 is flying off the shelves and HTC is suffering, and it’s obvious. Each one of Samsung’s smartphones are versatile and target a much larger audience. It speaks to those who want of need expandable storage or removable batteries, those who don’t care either way, and everyone in between. And that’s because Samsung offers a no-compromise phone.
Simply copying every move Samsung makes, however, isn’t the answer. It hasn’t worked for LG, and it will never work for HTC. Instead, HTC needs to tweak its core philosophies and find a way to continue to build fantastic hardware while adding versatility back to its phones.
But there is also another huge factor that HTC seems to miss … almost every time. Marketing.
HTC has a knack for going over the top with its marketing just prior to and shortly following the launch of a new phone. Fast forward a month or two, and that advertising slows to just above a slow idle. Samsung, on the other hand, is full speed ahead with its marketing a specific device until its successor comes around. It’s aggressive and pushes boundaries. And in the end, it pays off.
It’s tough to say that any one change will improve HTC’s standing. We’ve learned that sitting idly by and not actively trying new things that work will ultimately put the company in a very tight spot. That’s the point where talk of acquisitions begin to surface. HTC has the prowess and brand recognition to pull through the turbulence and become a power player once again.
Truthfully, I imagine part of HTC’s problem is the horde of haphazard smartphones it released in 2010 and 2011 that is ultimately hurting the company. Those people are now upgrading to a new phone, and due to the lack of updates and poor performance, existing HTC owners are looking to other manufacturers or platforms for their next device.
It’s impossible to say what the root of the problem is. There’s a lot that goes on behind the scenes that we can never begin to factor in. But if HTC wants to take from the likes of Samsung, it’s going to have to play hardball and bring the game to Samsung with versatile hardware and near excessive advertising.