HTC’s meteoric rise to the top of the smartphone market can largely be attributed to their early investment and strong commitment to the Android platform. They were named “Device Manufacturer of the Year” at the 2011 GSMA Mobile World Congress conference, and the company was even estimated to be the top smartphone vendor in the US as late as last year. The first half of 2011 was a banner year for HTC with six straight months of record breaking revenue, but things came to a halt with the release of Apple’s iPhone 4S, and HTC’s fortunes have seen a decline with their sales plummeting 35-percent year-over-year through the first quarter of 2012. They’re struggling to even turn a profit these days with Samsung and Apple dominating the market, and things won’t get any easier for their finances if Nokia’s patent infringement lawsuit is successful.
ChangeWave Research conducted a pair of surveys back in December and March on the manufacturer that consumers were likely to choose for their next smartphone, and interest in the HTC brand were behind Apple, Samsung and even Motorola. Their share hasn’t changed from December to March, and even the release of their new flagship lineup, the HTC One series, did little to drum up interest. The Taiwanese company previously controlled the market for Android-powered devices in the US, but they were finally moved off that perch by Samsung earlier this year. With Samsung’s continued growth, it’s hard to see HTC retaking that lead anytime soon.
HTC’s recent woes are certainly not for a lack of trying. The HTC One series is a step in the right direction with a radically redesigned device: it looks markedly different from the tired design scheme HTC has been recycling on a number of phones, and it is arguably one of the best looking phones out on the market right now. While both the HTC One X and S have been receiving rave reviews from all around — and my impressions from some hands on testing were all very positive — it seems that a lot of consumers are eschewing buying a new smartphone until Apple’s iPhone 5 or the Samsung Galaxy S3 hit the market.
Samsung’s oft-teased and highly anticipated Galaxy S3 drew a lot of attention prior to its official announcement, likely cooling off some of the hype from HTC’s One lineup — something that could have potentially been offset if marketing wasn’t so weak at HTC. The Korean manufacturer has already shown their commitment to spreading the word about the Galaxy S3, and if HTC’s 20-percent year-over-year drop in revenue for the month of April is any indication, the blitz for the impending launch of the Galaxy S3 is already overshadowing the HTC One series. Granted, the HTC One lineup only launched in Europe in April, and it didn’t make its stateside debut until late in the month, but they have a tough battle ahead of them against the new Samsung Galaxy.
The one smart thing HTC is doing marketing-wise with their One series is taking a cue from Samsung’s Galaxy lineup and their approach to branding (although they may have hurt themselves a bit by having a rebranded version of the One X heading to Sprint as the EVO 4G LTE). Creating a flagship smartphone with an easily recognizable name that is synonymous with the company can go a long way toward improving brand name recognition. If the phone makes a splash and resonates with consumers, it could help them regain some footing while adding some new, loyal customers along the way.
HTC doesn’t hire the likes of the legendary Samuel Jackson or a lazy Zooey Deschanel (seriously, who has tomato soup delivered to their home?) to pitch their products, nor do they spend anywhere near the amount Apple does on marketing. However, if HTC wants to reverse their slide, pouring more money into raising awareness for their products would be the right place to start.
New CFO Chia-Lin Chang hasn’t been on the job very long, but he’s joining HTC at a precipitous time. This is a pivotal year for HTC, and they can’t afford to slip up with the competition passing them by. The aforementioned Samsung Galaxy S3 is by far their biggest competitor in the Android space, and Apple’s iPhone 5 is guaranteed to only make things tougher.
HTC has the resources and drive to turn their fortunes around, but it starts with the basics: promoting their brand and advertising their products more often can go a long way in helping the company get out of this slump. We’ll know a lot more about the company’s outlook after sales figures for the HTC One series start to trickle out.