HTC enjoyed a meteoric growth trajectory along with Android over the last few years, pushing it from a no-name, white-label manufacturer to the world's fourth-largest maker of mobile phones. But in recent months, its growth has come to a near halt with raging competition from Apple and Samsung.
HTC cut its outlook for the year based on soft demand for its current lineup of smartphones, and its stock has taken a beating in response. Its share price is down 30% since November 18 as investors fear that its product roadmap isn't strong enough.
But don't let the market fool you, says HTC. CFO Winston Yung told Reuters Monday that "HTC is not another Nokia," referencing the spectacular fall of Nokia from the world's number-one smartphone maker out of the top five.
"I don't think it's so serious," Yung said of its share-price drop. "We will focus on the product next year, better and more competitive. Other than new LTE phones for the U.S. market, we have phones for the global market. We will launch some worldwide flagship products. We're confident in them."
[ As enterprise IT loosens its death grip on the RIM BlackBerry, we test the top mobile rivals. Check out Android Vs. iOS Vs. Windows Phone 7: Enterprise Shootout. ]
HTC makes some of the most compelling models available in the United States, such as the Amaze 4G (available from T-Mobile), Vivid (LTE 4G smartphone for AT&T), and the Rezound (LTE smartphone for Verizon with Beats Audio integration). So what's the problem?
HTC's phones have fallen into a cookie-cutter rut. The phones look good, in fact, they still look better than many competing models, but it is nearly impossible to tell one HTC smartphone from another. HTC hasn't changed up its design language in recent years. It has also been out-gunned by Samsung in the spec department. Samsung has been faster to deliver more smartphones that have dual-core processors with large, bright displays, and high-end cameras. HTC has been too slow to create new smartphones that have a unique look and top-rated features. While HTC has updated the capabilities of its Sense user interface, the overall architecture is largely unchanged from 2009, and nearly all Sense smartphones have a user interface that is indistinguishable from other HTC smartphones.
Perhaps HTC's biggest problem, however, isn't its handsets. Instead, HTC's lack of brand power is the real issue, contend some. Apple and Samsung (and to a lesser extend Motorola and RIM) have real brand recognition in the eyes of consumers. HTC, despite its playful commercials and catchy slogans, is still below the radar of many smartphone buyers.
What do investors want from HTC? They want a faster product-refresh cycle and better marketing and advertising to boost HTC's appeal and visibility.
It's hard to disagree with those wishes, as HTC's phones have become stale-looking in a market that is rife with alternatives. The relentless competition in the smartphone markets calls for bold moves, not baby steps.
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