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HTC in a nutshell: What went wrong and what went right

Following Google's $1 billion cash injection into keeping HTCalive, we take a look at what went wrong - and what went right - with the Taiwanese company.

Published onSeptember 21, 2017

Late last night, HTC sold off part of its R&D workforce to Google in an attempt to right the ship after a years-long slump. The $1.1 billion cash injection will keep the lights on at HTCin its original form and help keep the dream alive for a little while longer – far better than what happened to Nokia when it was struggling.

Google is now set to take some 2,000 or so of HTC’s ‘Powered by HTC’ research and development team and make them Googlers who will be set on a new hardware mission. What that is we won’t know for some time, but the scope is broad: new smartphones, adding Google Assistant to IoT devices, and so on.

The sale is good news for the  20-year-old company and it will hopefully  give it a fighting chance at sticking around for the next 20 years. HTCwas once a true contender and it could be again. When Nokia fell during the start of the Android revolution, HTCmade hay.

Around 2010, the company wisely switched from Windows Mobile to Android, bringing out the first phone to market with the new, open source OS. There’s a good chance you or someone you know had an HTCphone that they remember fondly from around this time.

Using the first Android smartphone I owned in 2017

But how did we get here? What went wrong and what went right for the storied Taiwanese manufacturer?

One timeline that tells the story in a graph is the stock valuation of the company – the meteoric rise and catastrophic freefall that might have finally been put on halt:

HTC Stock Price

What went wrong vs what went right

The what went wrong list isn’t a short one, nor is it a new take. As far back as 2012 you can find opinion pieces asking what happened to HTC.

There’s rarely a single smoking gun for any struggling company. Nokia and HTChave their similarities in that they were both squeezed out by the likes of Apple and Samsung.

If you ask HTC, both marketing budgets and slogans are to blame.

If you ask HTC(along with most tech journalists), both marketing budgets and slogans are to blame. ‘Quietly Brilliant’ never hit the mark, while advertising spends weren’t in the ballpark of rivals. And no matter which way you cut it, HTC’s idea of advertising was always bizarre.

“Samsung spent four to six times more in advertising than us,” said HTC’s president of global sales and marketing at HTC, Jason Mackenzie, back in 2012. (Mackenzie left HTCin January this year.)

But was it marketing, or was it the product?

Hardware: The highs and lows

Credit where it’s due: HTChas released some strong devices over the years, and it consistently got its designs more right than wrong.

But what was once clearly good fell into confusion. HTCput out more than 100 different phones across Android and Windows Mobile from 2009, without a clear way to figure out which were the high-end and which were the low end.

We wrote a nice run-through of every HTCdevice here; a valiant attempt to keep up with all the releases.

The good times started as early as 2008, the beginning of an upsurge that lifted HTCto being the third-biggest manufacturer globally at one stage.

The HTCDream (marketed as the T-Mobile G1) was the first Android smartphone to market and while it wasn’t an instant classic, it still marked itself as new, different, and unmistakably Android.

The HTCHero in late 2009 was a surprise. While the design was a little strange, it was unique, and had some premium features, including the first ever 3.5mm headphone jack.

2010 was the halcyon year for HTC. They produced their first ever phone for Google with the well-received Google Nexus One, added a home-branded variant with the HTCDesire, and then released perhaps their best complete package with the HTCLegend. The year finished with the HTCEVO 4G, an acclaimed smartphone that many rate among the best phones of all time.

As HTCfell, Samsung rose. From similar market share in 2010, by 2012 Samsung was up to 30% with HTCfalling to 6%.

2011 marked the beginning of HTC’s decline. The phones were still good, but the branding and design became varied and hard to track. By the end of the year, the golden run was had ended. HTC’s market share fell from a massive 67 percent to just 32 percent.

As HTCfell, Samsung rose. In 2010, Samsung and HTChad roughly the same share of the smartphone market at just over 7 percent. By 2011, Samsung was up to 19 percent, with HTCgrowing only to 8.8 percent. In 2012, Samsung was up to 30.3 percent, with HTCfalling to 6 percent. This trend continued every year.

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2011 saw HTCrelease close to two dozen phones, with 12 more in 2012, featuring names that included Desire, ChaCha, Rhyme, Salsa, Incredible, Sensation …and, unfortunately, many more. Speedy. Pyramid. Shooter. None of these made any sense and few were fashionable.

HTC also had dismal luck in partnering with Facebook. The HTCChaCha was a Facebook-centric Android phone. With a Facebook button. It flopped.

Undeterred, HTCand Facebook worked on the HTCFirst (or ‘Facebook phone’) which showcased the Facebook Home overlay. If the HTCChaCha flopped, the HTCFirst launched on life-support. AT&T launched it as an exclusive, and after a pitiful 15,000 nationwide sales in the first month, discontinued sales of it almost immediately.

2011 also saw the 7-inch Flyer tablet, HTC’s only dip into that market, struggle to sell.

Meanwhile, Samsung released the S and S2 smartphones to great acclaim, with bigger sales budgets and much better sales.

2012 should’ve been a good year. The critically-acclaimed HTCOne series launched starting with the premium One X, which had a stunning display. The One S was a quality mid-ranger and the V filled the low-end. But while the One X felt good, it was an oddly polycarbonate body as opposed to the cheaper, more rugged all-metal body of the One S. Each device was also carrier exclusive, making even harder for HTC.

Too many of HTC's phones were well-received, highly-regarded, and given good reviews, but few managed to sell big numbers.

This was the start of an unfortunate set of recurring nightmares for HTC. Many of their phones were well-received, highly-regarded, and given good reviews, but few managed to sell big numbers.

In later years, we loved the HTCOne (M7), regarded by many as HTC’s best looking phone. It had a successful launch for the company, but even it still couldn’t stop the slide.

The M8 was then hurt by a poor camera experience and while the M9 righted some of the wrongs it didn’t take a big enough step forward and sales fell by a further 50 percent.

The company then launched two arguably better flagships – the One M9 Plus, and the One E9 Plus within six weeks, with mixed availability and more of the same impenetrable branding.

Meanwhile, Samsung was progressing nicely with the S6 and the Note 5, flagship releases that the market found much easier to understand. Apple, of course, was leading the way there too.

The same continues to this day. The HTC10 was a big comeback, receiving a strong 8.7 in our review, but unfortunately it was given an eye-watering price. The only carrier in the US to carry it, T-Mobile, stopped selling it after just three months.

Unfortunately for HTC, by this point the brand had lost the support of carriers.

The latest and greatest HTC U11 earned a big 9 out of 10 in our review, with only a few quibbles. Unfortunately, by this point the brand had lost the support of carriers. Only Sprint offered the device – although it could be bought directly through HTCand Amazon online.

Sense UI

Hardware and software were much more important in the early days of “uncultured” Android, with skins and overlays a big part of the experience. Launchers were a big player.

The original HTCSense, on top of Android, was a winner back in 2009. In those early days, Sense was a great skin, including a funky time and weather widget, and HTC phones offered cool features like USB tethering as well.

As the Android experience improved, slowly at first and then more rapidly, Sense went the other way.

But as the Android experience improved, slowly at first and then more rapidly, Sense went the other way. HTCpacked more and more bloat into their skin until around Sense 3.5 in 2011, when finally the company realised stock Android had caught up.

Sense 4.0 was a reset, a new minimal take that worked more closely with stock Android, but by then, HTCwas already experiencing a big fall in sales.

There are any number of articles and videos from around that era advising owners on how to get rid of Sense, or at least stop it from loading. How badly did Sense combine with the HTCbranding disaster? It’s unclear, but it didn’t help.

Carriers helped themselves, not HTC

US carriers are notorious for being difficult. However, rather than push for wider availability, HTCrolled over and allowed carrier exclusivity, a strategy which clearly backfired.

While Samsung was powerful enough to be able to sell a phone like the Galaxy S3 on all four major carriers, HTC’s new flagship phone in 2012, the One X, was only available on AT&T. T-Mobile had the One S, while Sprint had the low-tier One V. Verizon went without.

The iPhone beat their carrier limitations with brand recognition and a good user experience. HTCdidn't.

The iPhone’s initial exclusivity with AT&T was planned out by Apple, designed to offer the best data experience possible via AT&T’s GSM network. The iPhone beat their carrier limitations with brand recognition and a good user experience. HTCdidn’t.

HTC Vive and VR

Switching away from phones to VR, the verdict is still to come. Certainly, the HTCVive is a winner, but the VR ecosystem is still far from mature, and truly mass-market sales are a long way off.

VR was big news in 2016, with the release of the HTCVive and Oculus Rift in close competition with each other, and PlayStation VR in the mix as well.

The Vive was generally considered the better experience, with some solid sales figures. But VR still hasn’t taken off, and there’s a growing sense that AR will find more use and applications in our lives.

Google did announce it is working with HTCon a standable Daydream VR headset – with no PC, phones, or wires required – but we still don’t have a release date for that yet.

HTC has been pretty upfront that it is betting the farm on VR, but there’s not a big enough market to sustain it. Yet.

In a nutshell:

We promised a nutshell, but if the above wasn’t packed down enough, here’s where we’re at.

Back in the day, HTCstruggled to capitalize on its early advantages following the decline of Nokia. The company blew its lead with poor software, confusing phone releases, and a minimal spend on marketing. Things only went from bad to worse after that, and not even great phones could make the company successful again.

HTC now finds itself with a trimmed down operation, extra cash in the bank, and a close partner in Google. So things could be worse.

HTC now finds itself with a trimmed down operation, extra cash in the bank, and a close partner in Google. So things could be worse.

Do we need HTC? Undoubtedly. Without the Taiwanese underdog, the Android and wider phone ecosystem will be poorer.

The problem for HTCis that it isn’t doing enough to grab (the right kind of) attention. Worse than being disliked, people just don’t really care either way. We need a fresh HTC. Maybe $1.1 billion, a streamlined workforce and closer ties to the Google mothership can deliver that.

Here’s to change.