Opinion: For HTC, the only way is up

by: Bogdan PetrovanJanuary 24, 2015

htc one m8 outdoors aa (12 of 14)

HTC’s story is one of ups and downs. Since its founding in 1997, the company made the jump from contract manufacturing (think today’s Foxconn) to successfully selling devices under its own brand. In the 2000s, HTC quickly climbed to the top of the mobile industry, thanks in part to an early bet on Android. But the good times didn’t last – market share, profits, prestige… it all went away, and HTC found itself struggling to stay relevant, pushed in a corner by Apple, and especially Samsung.

In the past two years, HTC has been as down as a company can be without closing down or selling out. “We’ve been through hell, but we survived,” an executive told us during one of the company’s regular Frequencies meetups. But can HTC do more than just survive? Can it thrive again?

We’ve been through hell, but we survived”

If you believe HTC’s communication head Jeff Gordon, 2015 will be a great year for the Taiwanese company, thanks to the “best ever” product lineup and some “huge surprises.” Yes, 2014 was supposed to be a “positive” year too, and while cutting costs and increasing revenue in Q4 were positive developments, last year wasn’t what HTC had hoped for. With that said, 2015 shapes up to be different. March 1, the day the new One is set to launch, could be the day HTC begins its symbolic comeback.

htc hima m9 invite

HTC is promising Utopia for its MWC 2015 event

On the financial side, HTC already managed to stabilize by streamlining its portfolio, outsourcing some of its production, and other cost cutting measures. While painful, these measures allowed HTC to turn a (tiny) profit in the last three quarters of 2014. More importantly, after three years of falling revenue, HTC managed to increase its quarterly sales in Q4 2014. We’ll see if the trend continues in Q1 2015, but signs are positive.

Financial health is a reflection of a company’s product strength, and on this front as well, HTC seems to be going steady. The One flagship series isn’t a hot seller, but HTC seems to have carved a niche for itself, with its focus on design and premium build. Mind share is strong, and when people talk about attractive phones, the M8 comes up inevitably. Perhaps more important than the top of the line, the mid-range is strong as well. HTC calls phones like the Desire Eye and the Desire 820 “premium mid-range” and it has a point – these are some of the best phones you can get without spending flagship money. And the strength extends down-range, even though HTC hasn’t really tried to compete in the budget category.

htc desire eye review aa (3 of 27)

The HTC Desire Eye caters to the selfie lovers

More reasons to be optimistic are in the pipeline. Due at MWC in Barcelona, the One M9/Hima will bring a few tweaks to the series’ iconic design, and a big upgrade in a key area – camera. Multiple reports point toward a 20MP camera – HTC is done with the UltraPixel experiment and with the gimmicky depth sensor found on the M8. That’s great news – the inconsistent camera experience was one of the reasons the One (M8) only scored a special mention in our best Android smartphones roundup. The M9 shapes up to be a very well balanced device that combines premium design with solid specs and a refined software experience.

HTC is not just a phone company anymore

But HTC is not just a phone company anymore. There’s talk of a smartwatch (or at least a fitness band) launching along the M9 on March 1. If HTC manages to apply some of its design prowess to the wearables category (where design is probably the #1 differentiator), it could have a hit on its hands. Also, at CES, the company talked about its ambition to connect all aspects of our lives, from our health to our homes. The whimsical Re camera is a step in that direction, though perhaps not the most promising one.

Then there are the tablets. The Nexus 9 isn’t a popular device, the way the affordable Nexus 7 was before it. But HTC probably sees the Nexus 9 as a brand enhancer, rather than a moneymaker. HTC will surely follow up with its own brand tablet, perhaps as soon as MWC. The tablet category isn’t growing explosively anymore, but for HTC, expanding in this area is still vital, after years of relying exclusively on phone sales.

To wrap up: a refined flagship; a solid mid-range; new tablets; new wearables; expansion beyond mobile; slowly improving financials. These are all reasons to be excited for HTC in 2015. What about the pitfalls?

The mobile landscape in 2015 is more competitive and complex than ever. HTC was a victim of Samsung’s cutthroat tactics, but now the Korean giant is getting a taste of its own medicine from Xiaomi. Things are in flux, and that means both opportunity and danger for tiny HTC. Because odd as it may sound, HTC is a small player – with a 0.9% sales share, it ranked 16th in Strategy Analytics’ global tracker in Q3 2014, behind Oppo and Vivo. It sold 25 times fewer phones than the leader, Samsung.

HTC’s slice of the market is thinner than ever

As a small fish in a large, crowded pond, HTC needs to put out great devices, but it also has to convince buyers that its products are better than competitors from Apple, Samsung, Xiaomi, LG, Lenovo/Motorola, and countless others. That requires smart marketing (an area where HTC struggled in the past, by its own admission), a flair for what consumers want, and the willingness to sacrifice profits. That’s clearly a challenge for a company that lacks the luxury of having a large, diversified group at its back, ready to support it with resources and money.

Turbulent as it may be, the current situation could give HTC the chance to snatch back some of the market share it lost so quickly since 2011. Is it now or never? Nobody can say for sure, but it’s hard to imagine HTC surviving for much longer without returning to real growth. Some voices are already calling for selling out to some cash-flush competitor hungry for international recognition. So, from that perspective, HTC’s only chance is to go up.

  • nebulaoperator

    ” Is it now or never?” They said that 2 times in a RAW M7 and M8. They made superb devices . And twice they did a flop with camera . Utrapixel. Ignorance or arrogance?

    • KenanSadhu

      Part of both, I’m sure, but they will never knew unless they tried, right? HTC is one of the manufacturers that the android community cheer for, hope they will have a great year!

      • nebulaoperator

        It is unique flagship that many look upon with envy. I own M7 myself and am quite disappointed with camera performance. It has been nearly two years but camera performance is still inconsistent. They tried to be unique here though idea was really good implementation below average . If they can’t nail M9 performance I have good reason to think there is some profound issue in the company. You can’t go wrong for the third time because only fool can keep on hurting himself like that. Only fool.

  • TeeJay1100

    HTC needs to put out great devices, but it also has to convince buyers that its products are better than competitors from Apple, Samsung, Xiaomi, LG, Lenovo/Motorola, and countless others. via Bogdan Petrovan- Android Authority

    This is something HTC hasn’t done in years. Convincing buyers their product is better is not an easy task. So they could rise again but it’s likely they won’t. They keep blowing every chance they get and the M9 is another missed opportunity.

  • Luka Mlinar

    Every next generation of HTC looks even more plastic/cheap looking. HTC has that solid feel but it’s the look that sells, not the feel. The company can’t survive on one device and this is the same argument i made back when the M7 came out. Not much has changes since then. Samsung has addressed this somewhat with the Alpha and then the A5. You know you’re in trouble when Samsung beats you in the design department.

    • Airyl

      I’ve never really met a person who told me the M8 looks cheaper than the Alpha. I understand that people have their own opinions, but that’s a seriously extreme opinion.

      • Luka Mlinar

        I wasn’t talking about the One line but everything else.This is why i said “The company can’t survive on one device…”.

        • Airyl

          I understand. The Desire phone line has always looked cheap to me, with their shiny, glossy plastic look. However, the company does have other phones made of plastic that look a lot better than their glossy counterparts, like the E8 and new Desire Eye. I don’t suspect they’ll be making anything like the Lenovo Vibe X2 soon, but what they already have is actually not too shabby.

          • Luka Mlinar

            Agreed on the E8, not the Desire Eye :P

    • nebulaoperator

      You are talking about mid rangers here which by the way are one of the best looking plastic smartphones. Don’t even try to smear up HTC design language because hardly anyone else demonstrates such a level of refinement and articulation when it comes to smartphone body.
      Alpha is the best looking Samsung smartphone but the Android.

      • Luka Mlinar

        Ok so we crossed out Samsung and their mid range offering (new one anyway). Sony makes good looking mid ranged phones and that’s because they are based on the Z design philosophy. LG’s older range L90 type devices are really cheap looking but the newer G3 based line (beat, stylus and that other one) are ok. The new Flex 2 is hot but again based on the flagship so similar situation like Sony. Motorola same story. Airyl kind of misunderstood me, the One are well designed premium devices but their other ones like the Desire eye and the 820 look like they came out of a quarter machine.
        But yea, that’s just my opinion.

        • Renascienza

          In fact, I am sure that LG Flex 2 will be “The King of Montain” on 2015.

          But is a big montain at all, and there is a lot of space to another great devices. I am looking forward to M9.

          • Luka Mlinar

            I would like to think that the LG Flex 2 was a good opener for 2015. Lets hope everyone else does just as good a job. And to think i didn’t much care for the original Flex.

      • Avatar.

        I Have the HTC desire 816 and for a plastic ” midrange” phone it feels good in the hand. I think it’s has a nice look and I love the 5.5″ display and the BoomSound front speakers.
        $300 dollars from virgin mobile. It is an upgrade from my Galaxy S2 from virgin mobile.
        Loved the S2, good phone. This is better, but of course it’s newer.

        • nebulaoperator

          I had S2 myself :)

  • samih nabil

    New HTC One M9 – YouTube


  • Mike Bastable

    I think that calling the design of the one “iconic” is somewhat premature, icons are usually very successful. HTC needs to sell phones, and there they are failing..this they need to either lower the price and launch a large hit handset. Otherwise we need to cut back the coverage of HTC and accept them as a capable niche producer of higher end handsets for limited release…this way they can also fine tune their profitability..
    Their time has passed really. Their stuff is niche but too expensive. The lack of redesign for the new products shows lack of r&d rather than extreme confidence. Again HTC has no focus, enough with the cams, watches etc (these will not be huge hits) concentrate on the phones.

    • Anonymousfella

      Yeah it has got critical acclaim but to be iconic it does have to bee popular with consumers! Has the M7 or M8 crossed 10M sales?

  • Renascienza

    Unlike “some giant players”, HTC **deserves** succeed.

    The company is loyal to consumers and partners, make “great devices” over “profitable devices”, listens and responds to the concerns of users.

  • excalibur1812

    Apethy and arrogance, with no thought or concern for customer service. Guaranteed plan for failure.
    What a miserable, pathetic attitude for a company to have.

  • Androidin

    The new htc one m9 is a desaster. Again this black bar with no function on top of the big speaker. Its 2015 and this phone has a display case ratio like its from 2011.

    • KenanSadhu

      I agree, that is one thing they need to consider. Maybe they could show the HTC logo in another way, so at least it’s just screen + speakers (still big, but more efficient)

  • krym73

    Samsung has the Samsung Experience Shop where they offer free technical support and experts that know your phone, HTC needs to respond to this program doing something similar or I’ll find it hard for them to make a come back.

  • BatDroid

    I think sense UI is underrated…. I find it smoother than stock.I hope they come up with a fresh design for One and One Max, without loosing goods things about last iteration. For me, slightly more polished ‘sense’, a lot better camera, significantly bigger battery, top specs, in a relatively shorter body should do the trick.