HTC’s Bizarro World: where the maker of the best smartphone gasps for air
May 22, 2013
If you polled a roomful of smartphone pundits about the best phone you can buy right now, there’s a good chance plenty of them would say the HTC One. Hell, we might even say that. So it’s a bit strange to hear stories of the company bleeding top staff and continuing to hit hard times ... while simultaneously selling one of the most important phones of the year. Welcome, HTC. You've officially entered Bizarro World.
The latest word of HTC’s struggles comes from The Verge, whose sources say the company lost several top staffers during the last few months. The most significant was Chief Product Officer Kouji Kodera, who reportedly set sail last week. But the company also lost its VP of global communications, its global retail marketing manager, its director of digital marketing, and its product strategy manager.
One of those same sources describes the company as being in “utter freefall.” They also point to the immediate failure of the “Facebook phone” (the HTC First), some questionable decisions from CEO Peter Chou, and the near impossibility of competing with Samsung.
Sounds like shaky ground, to say the least.
But another way to look at it would be ... huh?
It’s no secret that the HTC One is one of the most intriguing smartphones around. Many respected tech reviewers (including Gizmag) agree on this point. Phrases like “stunning,” “premium design,” and “the best Android phone you can buy” follow it damn near everywhere it goes.
Maybe the best way to explain this freak occurrence is to ignore, for the moment, HTC’s present. Look instead at its recent past. The pickle it’s in now is probably more a reflection of that.
The last couple of years saw HTC squander its impressive start during Android’s early days. It released too many phones that didn’t really differentiate themselves. It centered too much of its marketing around Beats Audio – a feature few seemed to care much about. Turkeys like the HTC Thunderbolt and EVO 3D were just the icing on that foul-smelling cake.
Oh, and then there’s that behemoth known as Samsung. The Verge’s report said that was the most common thread when chatting with HTC sources. Samsung makes its own chips, it makes its own displays, and – most importantly – it has an insane, off-the-charts marketing budget. HTC can’t hope to compete on any of those fronts.
That doesn't necessarily mean there isn't hope. The One hasn’t yet had time to affect HTC’s bottom line. In fact, part of the reason those Q1 results were so disappointing is that the One was delayed. Spending was high (from prepping for the One, no doubt) and revenue was low (no One to sell). So the bottom fell out on profits.
But the next quarter will be where we get a better picture of the company’s future. The Verge’s sources say that the One's sales got off to a slow start, but that was partly due to supply issues. Now that those kinks are ironed out, sales are reportedly picking up. Considering the phone’s extremely positive reception, that isn't too surprising.
Too important to fail?
No matter HTC's finances, though, it’s hard to overstate the company's importance in the smartphone market. I don’t see how having Samsung alone utterly dominate the Android part of that field can possibly be good for consumers.
We love many of Samsung’s products. But you know what we love even more? Choice.
Do you prefer the Galaxy S4? Or are you going with the HTC One? Do you like TouchWiz’s gimmicky bag of goodies, or Sense’s elegant sophistication?
Who cares? The best part is that you can make that decision. Without a healthy HTC, Android takes even more of a backseat to Samsung than it already has. And since we wouldn’t hold our breath for a dramatic Nokia, LG, or BlackBerry comeback, we're looking at a huge market utterly dominated by just two companies: Apple and Samsung. Ask any US wireless subscriber how those virtual duopolies work out for customers.
It would take a miracle for HTC’s sales and profits to reach Samsung levels, or even to put much of a dent in that lead. We aren’t hallucinating here.
But smartphone customers – and fans of the Android platform in particular – would still be better off with a reasonably healthy, head-above-the-water HTC. The company has laid a few eggs, but it's also made some outstanding smartphones that push the product category forward. Companies like that are good to keep around, wouldn't you say?
HTC’s situation might not be quite as backwards as it seems at first blush. But it is still one of the most intriguing smartphone storylines of the year ... and, in my opinion, it’s also the story of a company worth rooting for.
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