htc one m9 vs htc one m8 7

Another day and another HTC device was announced; yesterday the Taiwanese manufacturer introduced another high-end device for Asia in the form of the HTC One ME and while the One M9 remains its western flagship, the company has three to four devices that could all be its Asian flagship.

With so many devices and lots of confusion over which is the real flagship, is it time for HTC to rethink its product strategy?

Financial Performance

Despite launching several new products over the past few months – including the One M9 which was heralded as its saviour – the company’s financial performance has still continued to decline. After posting losses for seven successive quarters until 18 months ago, HTC finally returned to a profit last year but how has the company done since its return to the black?

In Q2 2014, the company’s unaudited accounts showed operating profits of $80 million from revenues of $2.05 billion. Compared to the year before, however, revenue dropped by 8% while operating profit increased by 118%. This performance certainly isn’t bad considering that compared to Q1 2014, profit was up by 97% and revenues by 220%.

Fast forward three months and it’s a familiar tale; a small profit but declining revenues. In Q3 2014, the company recorded profits of $21 million from $1.37 billion in revenue, which – while being honourable considering they reported large losses the previous year – are meagre compared to its rivals.

Moving to the last quarter – which ended on December 31st 2014 and includes the popular holiday season – and HTC managed to capture some of the holiday spirit with a slight increase in revenue and posted tiny profits of $14.67 from revenues of $1.49 billion.

Finally, the company’s Q1 2015 performance was revealed a month ago and in the first three months of this year, the company recorded a net profit of $11 million from revenues of $1.3 billion. Revenue and profit was slightly lower than Q4 2014 – which is to be expected given the Christmas rush and inevitable slow sales in January, which affects all companies – but the turnaround year-on-year was certainly impressive.


As you can see in the chart above, HTC may have returned to profit last year but the company’s recovery has slowed and profit is in decline. The One M9 was meant to be the handset that kickstarted a revitalised HTC but weak demand meant April this year was HTC’s worst April in six years and its likely that the company’s recovery has been stunted by this poor demand.

Today, the company confirmed that it expects to return to its loss-making ways for Q2 2015 and predicts a loss of between TW$7.95 billion ($257 million) and TW$9.05 billion ($291 million). The reason for this loss? The company had this to say:

The change for revenue outlook is due to slower demand for high-end Android devices, and weaker than forecast sales in China, while gross margin is revised primarily on product mix change and lowered scale. At the same time, increased competition has raised operating costs for product promotion; HTC is enacting measures to further improve operating efficiency.

At the same time, the company said it will incur a “one-off impairment of NT$2.9 billion for idled assets and some prepaid expenses“, which essentially means the company booked more production capacity for the M9 than it needed and has to foot the bill for this. This is backed by up a report from Taiwan, which suggested HTC cancelled 30 percent of One M9 component orders due to lack of consumer interest.

In the wake of ever fierce competition from both, the established brands – such as Apple, Samsung, LG and Huawei – and the emerging brands – such as Xiaomi, Gionee, OnePlus and Oppo – what does HTC need to do?

Product, Product, Product

For many years, HTC was a white-label manufacturer, producing Windows Mobile handsets – such as the XDA, MDA and SPV ranges – for other companies to release under their own brand and during this time, the company was one of the world’s leading smartphone makers (by volume). Like other white-label manufacturers – including Huawei and ZTE – the company switched focus and began offering handsets under its own name and for a while, this strategy worked.

During this same period, Apple reigned dominant over the smartphone market and all Android OEMs were attempting to produce handsets that could rival Apple for sales, design and features. For HTC, this meant the company’s One Series, which began with the HTC One X and was followed up by several devices such as the One S, One V and the One X+, which is still – at least in my opinion – one of the best HTC Android devices ever made.

The key thing about HTC’s product strategy is that it hasn’t changed an awful lot over the past few years; simply put, the company produces lots of different devices each year for the low-end, mid-range and the high-end in the hope that collectively – and individually, in the case of its flagships – they will prove to be the catalyst to return the company to its former glory.

The problem with this strategy? It clearly isn’t working as HTC’s operating profit percentage continues to decline. HTC – like most Asian manufacturers – introduces an influx of new devices across Asia to capture demand and despite declining profits, this shows no signs of letting up. Since the One M9 was announced back at MWC 2015, the company has announced no less than THREE new premium high-end devices in Asia and any of these could arguably be the true HTC global flagship handset.

Let’s take a look at how each of these handsets compares to the One M9, which HTC claims is its global flagship:

DetailHTC One M9HTC One M9+HTC One E9+HTC One ME
Display Size:5.0 inch Super LCD35.2 inch Super LCD35.5 inch5.2 inch
Display Resolution:Full HD (1080x1920)Quad HD (1440x2560)Quad HD (1440x2560)Quad HD (1440x2560)
Display Density:441ppi565ppi534ppi565ppi
Processor:octa-core Snapdragon 810
4 x 2GHz + 4 x 1.5GHz
octa-core MediaTek MT6795T
8 x 2.2GHz
octa-core MediaTek MT6795M
8 x 2.2GHz
octa-core MediaTek X10
8 x 2.2GHz
Expandable storage?microSD, up to 128GBmicroSD, up to 128GBmicroSD, up to 128GBmicroSD, up to 128GB
Build Type:Aluminium UnibodyAluminium UnibodyPolycarbonate + metal framePolycarbonate + metal frame
LTE:Cat 6 (300Mbps DL, 50Mbps UL)Cat 6 (300Mbps DL, 50Mbps UL)Cat 4 (150Mbps DL, 50Mbps UL)Yes, FDD/TDD
Fingerprint Sensor:NoYesNoYes
SIM cardSingle SIMSingle-SIMDual SIMDual SIM
OS version:Android 5.0Android 5.0.2Android 5.0Android 5.0.2
User Interface:HTC Sense 7HTC Sense 7HTC Sense 7HTC Sense 7
Sensor size:20MP20MP + 2.1MP20MP20MP
Optical Image Stabilisation:NoNoNoNo
Video recording (1080p):60fps60fps60fps60fps
Video Recording (4K/2160p):30fps30fps30fps30fps
Front camera:4MP Ultrapixel
4MP Ultrapixel
2160p video
4MP Ultrapixel
Flashdual-LED (dual tone)dual-LED (dual tone)LED flashdual-LED (dual tone)
Capacity:2840 mAh2840 mAh2800mAh2840mAh
Removable Battery?NoNoNoNo
Fast Charging:Quick Charge 2.0
60% in 30 mins
Availability:GlobalAsia onlyAsia onlyChina only so far
Expected in Asia
RRP (US$ or equiv):$649$797$575TBC

Aside from minor tweaks to the processor and build, any of these handsets could easily replace the One M9 and they all have one feature that is sorely missing from HTC’s own flagship: the Quad HD display that many people wanted HTC to use in the One M9. Had HTC waited a few months to make its new announcements, we could understand that a better handset was about to be released to the market but this isn’t the case; the One M9 was announced on March 1st, the One E9+ launched on March 30th and the One M9+ on April 8th.

Now on June 4th, we have yet another device, and while this might be helping with HTC’s sales in Asia, it won’t help sell the One M9 in the West. In fact, it’s entirely possible that all of these new devices only serve to devalue one of the HTC’s biggest assets – the One brand – across the world.

The HTC One Brand

The introduction of the metal-clad first HTC One – also known as the One (M7) – was a chance for HTC to show that the company can do things differently. While its chief Android rivals – Samsung and LG – were pushing out devices made from plastic, the One M7 was HTC’s way of telling people to sit up and take notice of the company.

The gorgeous metal finish, the beautiful curves and the outstanding dual front BoomSound stereo speakers were just a few of the reasons to love HTC’s latest product range. With the introduction of the One Max later that year, HTC brought the same design to the flagship price point and the One branding was total; simply put, buying a One device meant a flagship premium experience with outstanding build quality that wasn’t offered by anyone else.

Since the beginning of 2014 there have been ten handsets released with the One branding – excluding regional variants of the same handset but including dual-SIM models as these are fundamentally different – and these have been priced between the mid-range and the high-end of the market.

Clearly something isn’t right here; HTC spent millions promoting the One Brand – including its expensive yet lucrative sponsorship agreement with UEFA to be the official smartphone for the UEFA Champions League and the UEFA Europa League – yet they dilute the One brand every time they introduce a new handset under the One Brand that doesn’t offer the same luxury as the original One.

The company also has the Desire brand and, positioning wise, handsets that didn’t fall under the premium One brand were largely expected to be housed under the Desire brand. With handsets like the One E9+ however – which combines flagship specs with the plastic build found on the Desire Eye – the company decided to put it under the One Brand, despite the obvious lack of anything resembling a metal build.

While there have been ten One devices released since the beginning of 2014 (plus five market variants), there have been 22 different Desire devices announced and released around the world (same conditions as above). The One E9+ would have been swallowed up by the company’s low-end and mid-range Desire brand only and the ‘proper’ course of action was apparently to put it under the One brand, but again HTC’s product strategy clearly makes no sense here.

By way of comparison, if you buy an iPhone, you understand exactly what you’re buying; if you buy a LG G device, you know it’ll be a flagship handset; if you buy a Galaxy S handset, you know it was Samsung’s flagship and if you buy a Galaxy Note, you know you’re getting a premium phablet device.

Previously, when you bought a HTC One handset, you knew you were getting the best that HTC had to offer, but now? Well now, you can’t be sure there’s not another better handset around the corner for the Asian market.

Enough is enough – surely it’s time for change?

As a fan of HTC’s devices – the One M9 excluded for the reasons I’ve outlined already – it pains me to see the company acting like a bull in a china shop.

One tactic that worked very well for Samsung in the past was to introduce lots – and I mean lots – of different handsets (I think at one point the company support over 100 different smartphone models) in a bid to gain market share and HTC has seemingly begun to follow suit. Yet Samsung has slowly cut back its product range and realised that less is more and HTC certainly needs to follow suit; not only should it cut back but it should drastically reduce the number of handsets it has to support and it should implement this change quickly.

Camera Shootout: HTC One M9 vs Galaxy S6 Edge vs Honor 6 Plus vs Huawei P8

Many people have quoted Apple’s sales model as a tactic for its rivals to follow and for HTC, it needs to adopt the less is more approach. Apple’s brand recognition and user loyalty means the company doesn’t need to introduce more than one new smartphone – two if you count the different screen sizes – each year, but this is a luxury that HTC can’t afford. However, the company can learn from the model.

If I were HTC, I would adopt the following approach and release cycles for premium flagships; one announced at Mobile World Congress – or just before – and one larger flagship towards the end of the year at IFA. This is similar to Samsung’s product roadmap but this is a strategy that works.

Alternatively, the company could introduce just one flagship range per year but offer it in two screen sizes; one around 4.7 to 5.0 inches – the original One M7 had a 4.7-inch display that was fantastic – and another at between 5.5 and 6.0 inches. This single handset would feature global LTE support allowing them to use a single variant in most markets (and then have regional variants of the same handset, with the same name for compatibility reasons).

This flagship would have the best that HTC has to offer and this is the key thing; the point of any flagship device is that it offers the best from that company at that time. Rather than split a Quad HD display apart from the its flagship and use it in a lesser device in one part of the world – like the whole One M9 fiasco – HTC should produce ONE device each year and make it the absolute best they can.

Yes, there will always be a demand for mid-range devices and I certainly don’t recommend the company stops producing them, but I would not market them under the premium One brand. Devices like the One E9+ should be made available in more global markets (as long as the MediaTek chipset is compatible with LTE etc) as a lower-priced alternative to the flagship and this will allow HTC to really capture the market at both, the top end and the lucrative mid-range.

By way of example, the One E9+ just launched in India – where HTC isn’t offering its One M9 flagship but is offering the E9+, the M9+ and presumably, the One ME – with a recommended retail price of Rs. 36790, which equates to $575 (£375). At this price point, especially in the UK, there is nothing that comes even close to the One E9+ and this is a classic example of a company catering for the Asian population without considering other markets around the world.

HTC’s One Brand may have been one of its biggest assets but more and more devices are only serving to dilute the brand. This year has already seen the Taiwanese manufacturer launch non-mobile devices such as the HTC Grip fitness wearable and the HTC Vive virtual reality headset and if the company doesn’t fix its branding and product strategy, we may find that HTC goes the way of BlackBerry and others, with its smartphone products no longer exciting the market.

If this does happen, I would certainly be disappointed but the company’s recent profit-laden quarters show that its on the right road to survival; all it needs is tweaks to its product strategy and strong leadership – which new CEO Cher Wang should provide – and it may yet recapture some of its former glory.

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