Why is HTC Struggling So Much?

[qtran414]

Hi Everyone. I have been an Anandtech follower for years, but am new to the boards. Something I was thinking about last week was the predicament HTC has gotten itself into the past year and why they are failing despite having what I believe is a superior product range.

In a nutshell: HTC can't compete with Apple and Samsung with pure marketing muscle or feature for feature so they need to:

1. Find a particular niche and stick to it
2. Find smaller key Influencers as spokes people/marketing partners that support that niche
3. Be scrappy with marketing and don't be afraid to take direct aim at competitors
4. Revamp the brand and ditch "Quietly Brilliant"
5. Don't go down market

I wanted to get everyone's thoughts on what you believe HTC's biggest issues actually are and how they can improve their position.


Edit by Moderator PM
Removed link to the blog post.

 

[notposting]

Example:

I bought a used HTC Trophy on eBay last summer. It was beat up, died this winter, bought one new(ish?) from a college bookstore on eBay this winter.
Bought a brand new iPhone from VZW this May and sold it unused.

So, while I bought 2 HTC phones, neither sale "counts" and the iPhone sale did.

If they don't offer a mid-to-high end WP on Verizon this fall (with good battery and excellent camera) I won't be buying another one. They should be trying to stand out with quality...and getting a better ad company wouldn't hurt either as you point out.

edit: welcome to the boards, look out for troooolls

 

[Bateluer]

I think HTC dug themselves into a little bit of a hole by producing so many devices with similar specs across all carriers with completely forgettable names. Some of them with styling that reduced the build quality too. You can blame carriers for a lot of this.

With Samsung delivering industry leading phones, they're a competitor to be reckoned with. HTC will need to release multiple generations of One level quality to restore their image.

 

[Bitek]

I think you are right about creating a brand image an build on it. They have to quit making so many idiotic sounding phones and create a recognizable line.

They had a great thing going with the Incredible. And the Evo. Then what?

Inc2 launched 18mos later as a midrange budget phone that was poorly marketed and under-spec'd. Later they launched a solid dual core phone, what did they call it? A Rezound? WTF is that? Marketed as a 21st century GhettoBlaster. Didn't sell well? Really?!
Why not an Inc3, altho they already dumbed down the brand, so...

That was on top a myriad of crap throwaway phones no one can remember and will never get updates.
IDK how it is in the world market, but I imagine its just as disorganized.

They will be disadvantaged to Samsung due to lack of vertical integration and small size. Lack of patent clout also hurts.

However, I do think there is a place for a top-tier android phone. The galaxy S is the only one to really do this, altho I think it could be done even better. There is hardly a "complete" android phone. Each one is lacking something big. Batt life, decent screen, good reception, nice styling, cutting edge hardware. Most android phones are lacking somewhere.

Lastly, cater to the enthusiasts. At least let the phone remain a playground like the nexus line, but better built. Gotta work well for the avg consumer, but light the fires of the fanboys.

 

[Puddle Jumper]

I think their main issue is they haven't executed consistently enough to build any momentum. The Evo and Incredible were very good devices but the follwowing generation was very mediocre in comparison. By that point Sense was very dated and the Evo 3D and Sensation were completely outclassed by the Galaxy S2 in terns of both hardware and software. The Rezound was a little better but by the time it came out it was overshadowed by the newer Galaxy Nexus and Razr. The One series was well executed on hardware and has a greatly improved version of Sense but at that point Samsung had 3 winning generations in a row and had established the Galaxy S brand as a flagahip on every carrier.

 

[Bateluer]

I think you are right about creating a brand image an build on it. They have to quit making so many idiotic sounding phones and create a recognizable line.

They had a great thing going with the Incredible. And the Evo. Then what?

Inc2 launched 18mos later as a midrange budget phone that was poorly marketed and under-spec'd. Later they launched a solid dual core phone, what did they call it? A Rezound? WTF is that? Marketed as a 21st century GhettoBlaster. Didn't sell well? Really?!
Why not an Inc3, altho they already dumbed down the brand, so...

The Rezound being junk didn't help it either.
They flushed the Incredible brand away with the Incredible 4G LTE, a midrange phone with substandard build quality. The EVO brand, which I understand they own, was diluted with several floundering phones on Sprint, the Evo 3D, Evo Shift, Evo Design 4G, etc.

That was on top a myriad of crap throwaway phones no one can remember and will never get updates.
IDK how it is in the world market, but I imagine its just as disorganized.

They will be disadvantaged to Samsung due to lack of vertical integration and small size. Lack of patent clout also hurts.

HTC and Qualcomm have a very tight partnership.

However, I do think there is a place for a top-tier android phone. The galaxy S is the only one to really do this, altho I think it could be done even better. There is hardly a "complete" android phone. Each one is lacking something big. Batt life, decent screen, good reception, nice styling, cutting edge hardware. Most android phones are lacking somewhere.

The HTC One X hits all your points, great screen, decent battery life, good reception, top quality modern styling, and build around the fastest SoCs currently available. It will just take a few more Ones for HTC to establish their brand. Let LG be the bottom feeder, they've yet to have a solid high end phone.

 

[ilkhan]

I think their main issue is they haven't executed consistently enough to build any momentum. The Evo and Incredible were very good devices but the follwowing generation was very mediocre in comparison. By that point Sense was very dated and the Evo 3D and Sensation were completely outclassed by the Galaxy S2 in terns of both hardware and software. The Rezound was a little better but by the time it came out it was overshadowed by the newer Galaxy Nexus and Razr. The One series was well executed on hardware and has a greatly improved version of Sense but at that point Samsung had 3 winning generations in a row and had established the Galaxy S brand as a flagahip on every carrier.

Pretty much this.

Each time they had a home run they made the next version crap, destroying the momentum. If the second gen EVO had been awesome it would have made people anticipate the third. Instead they gave us the fucking EVO3D which was totally not what people wanted. The Incredible line was the same way.

Making good products isn't enough. They need to consistently build great products.

 

[ponyo]

HTC went downhill when they ignored the enthusiasts and started catering towards the mass market by regurgitating the same design aka HD2 into dozens of similar phones over 2 year period. It was nice design back in 2009 but it suffered the Razr fatigue. It didn't help HTC cut corners with their hardware by skimping on the battery, flash memory/storage, and the display. Samsung meanwhile always used cutting edge top of the line display, ample memory/ app space, and beefier batteries. HTC phones also suffered from poor quality control with things like dust under the screen a common complaint. HTC also turned its back on the modding community by locking and encrypting the bootloader. Mod community like XDA were some of HTC most vocal early supporters. HTC communicated and helped early on creating loyal followers and customers. Most of that goodwill was lost when they decided short term profit from reduced warranty repair was more important than enthusiasts who gave them free advertising and referrals to family and friends. Samsung meanwhile kept their bootloader open and even acted like they cared about the modding community by giving free phones and devices to CM team and others and hiring CM man himself, Steve Kondik.

One X corrected several previous flaws but introduced three new ones. Lack of SD card slot, non removable battery, and severely messed up multitasking. Samsung meanwhile gave SGS3 SD card slot, bigger removable battery, and 2 GB of ram so it would have even better multitasking. Most Android users are about function over form and HTC missed the mark again.

 

[Dari]

HTC needs to get their shit together. They need to get better designers and simplify their naming scheme...

 

[gorcorps]

Welcome newbie! Just one word of advice: If you really do want to discuss HTC's struggles you might just want to put your thoughts here on the forum and not link to your blog. When your first post links to a personal site we consider it spam and you don't last long.

That said, I think HTC burned their candle too quickly. There was a complete flurry of phones from them on all carriers and I have no idea if any of them were worth a crap or not. There didn't seem to be any flagships, or if there was it didn't last long and there wasn't much advertising. Right now the One X a device that I KNOW is a top of the line phone from HTC, and I haven't known that about one of their phones in a long time. Samsung almost did the same thing with the different GS2 versions across all carriers, but luckily there was nearly just one per carrier (except ATT, and the international version).

 

[zerocool84]

HTC needs to keep building phones like the One X, Evo 4G LTE, and One S. Keep up the quality of their devices over a couple generations and they can gain back the confidence of people.

 

[dagamer34]

1) They are about two years behind Samsung in building a brand.
2) The HTC-Apple flap meant their product wasn't being sold for 2 weeks around the end of May
3) The HTC One X isn't being sold on all 4 national carriers.
4) Lack of SD card slot in the One X.
5) Lack of 32GB storage option in the US in the One X.
6) No hype machine.

Basically, HTC has entered a loop such that their previous failures lead to more failures.

 

[s44]

If the second gen EVO had been awesome it would have made people anticipate the third. Instead they gave us the fucking EVO3D which was totally not what people wanted.

Oh man, I forgot the 3D crap. Another misguided dead-end choice for differentiation, like the Beats boondoggle.

HTC also lost ground the last two years by being glued to Qualcomm. No coincidence that their best stuff in years (One series) has come while Qualcomm has their early-generation advantage (though Krait will lag real A15 in a familiar way soon enough) and HTC has finally reached out to use a different SOC design (Tegra3 on the international OX).

 

[Zaap]

They must be doing something REALLY wrong when a fantastic phone like the Evo 4G LTE goes pretty much unnoticed, with only one carrier using it, and yet people rave about it's ugly little sister the One X.

What the hell happend with that??

 

[WelshBloke]

HTC were flying up until the desire, after that they sort of went into cruise mode.

Right back into the early win mobile days HTC were the biggest smartphone maker (the xda in xda developers was made by them). Android was launched on an HTC phone in Europe and they were still really popular until post Desire.

When they went into cruise mode it gave some space in the market and Samsung started stretching its manufacturing muscle.

 

[kaerflog]

I'll summarize a list on what I think is wrong with HTC.
- Brand name recognition. Make one name your flagship model and improve it every year.
They had that when they came out with the EVO that was a clone of their best phone ever built, the HD2.
- Their built quality until this year was totally garbage. They made 2 phones back then that people were salivating over. The HD and HD2. To this day, I still think the HD2 was their best built phone. Thats saying something 2-3 yrs later.
I have the HD2 in my hand right now and the built quality is top notch. Minimal bezels and its not glossy plastic all over.
They regurgitated the HD2 over the next 2 years and none was as good looking as the HD2.
- They weren't very nice to the mod community unlike Samsung.
- And just when they finally made a flagship phone that is just as good as the GS3, they omitted a SD slot and removable battery. WTF ???

Sure they don't have the vertical integration like Samsung but its not like they don't have access to parts that are just as good as Samsung.
Two things that are in Samsung's favor are the SoCs and displays but Qualcomm has the best SoCs out right now and the displays HTC currently using is just as good or better.
I'm actually rooting for LG and HTC to come out with quality stuff that can compete with Samsung. We don't need Samsung to get too big and control the Android market.

 

[Suspicious-Teach8788]

See but the problem is you guys are talking about US phones. HTC phones in the US have been all over the place.

Worldwide, they had the Desire and Desire HD which was immensely popular, and the Sensation. The SGS2 was just a really well executed phone and took the market by storm.

In the US HTC's strategy is unclear. the incredible had some horrible battery life issues. The Incredible 2 is just an Incredible S. It wasn't a flagship anymore like the Sensation. The EVO had horrible battery life issues too and was an attempt to market 4G. The Thunderbolt and Rezound were just wtf phones also. Honestly, Verizon's had a slew of horrible phones until the GNex and SGS3. Hell I'd argue the OG Droid wasn't even that great. It was just hyped because it was America's first real Android answer to the iPhone.

So actually worldwide HTC was doing fine with yearly product cycles. The American carriers just screwed everything up royally.

I was kinda surprised how flat the Sensation fell compared to the SGS2. I think something about the locked bootloader definitely had people sore because the Desire sold DAMN well. Not as well as the SGS which came months later, but still. The Desire + Desire HD sold extremely well.

 

[PingviN]

Trying to flood the market with the same device in new packaging and with a new game backfired. The new "One" moniker is a step in the right direction, but they need to outdo Samsung, not just create an almost as good phone. Tossing out five hundred handsets a year with no consistent naming is a really bad idea, as HTC now has found out. I'm guessing we'll see HTC scale down operations and really focus on releasing 3-4 devices instead.

 

[BlahBlahYouToo]

Its a shame because I feel they make better phones than Samsung.

 

[Red Storm]

Releasing one good phone lineup is not going to magically undo years of mediocre offerings. It'll take time for them to get back on their feet.

Also I don't see them ever passing Samsung. It's like Intel vs AMD, the bigger company simply has too many advantages.

 

[Genx87]

I have owned 3 HTC phones. And I have to admit I was thinking about why over the weekend. None of the phones were terribly good. In fact one of them was terrible. My current phone is an Incredible? Or is it EVO? I cant remember which one goes on Verizon. Anyways the camera is crap, the battery life terrible, and it is sluggish. It also gets terrible reception everywhere I need to use it(home,work,dads home, cabin). It is actually comical I own a phone that barely works in 4 places I need it the most. Chances are high an iPhone will be in my future, not another HTC phone.

 

[MrX8503]

Because profits are razor thin, the only way phone manufacturers made money was to release a new phone frequently. It didn't matter if it was a rehash or not. This resulted their whole lineup being in a disarray.

Samsung used to do that, but not anymore. They've created a strong branding with their Galaxy and Nexus line. Moto is decent and HTC is terrible. HTC has no direction and their devices are all over the place. Unfortunately they weren't smart enough to carry on the Evo and Incredible branding.

 

[s44]

Unfortunately they weren't smart enough to carry on the Evo and Incredible branding.

Those weren't their brands to begin with -- they were Sprint and VZ's. After great flagship launches, each carrier decided to make the classic dumb short-term move of slapping its name onto lower and lower-end devices, burning through the brand rather than strengthening it.

(This was partly HTC's fault for releasing the same Snapdragon rehashes though.)

 

[jiffylube1024]

Having never owned an HTC phone (although I've looked at a few in store), I can say that easily their biggest problem is brand recognition. If people on Anandtech can't keep track of HTC's flagship phones the last few years - that's a problem. Until my mom and your mom has heard of the HTC - whatever model they market to the masses - HTC won't be able to break into the mainstream.

From what I gather, the One (X) is a good enough phone to compete with Apple and Samsung. Many people laud the screen as better than Samsung's SGS3 (though I am a bit partial to AMOLED's black levels). HTC needs to stick with a simplified product line name, at least for the high end. They can release a million lower end phones like Samsung for freebies and $50 on-contract phones, but their top has to be instantly recognizable and identifiable. They need to generate debate.

If you ask someone "which do you prefer - Apple iPhone or Samsung Galaxy" they will probably give you an opinion one way or another. HTC needs its own "Galaxy" to enter the conversation with.
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They also need to be more modder/unlocking friendly IMO. Every Samsung Galaxy phone I've owned I eventually carrier unlocked. Now, it's one of the first things I do - a no brainer. I like that. I also like the removeable battery (I sometimes buy a spare) and the SD card slot.

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Lastly, they need to stop being so gimmicky. The Evo 3D instantly comes to mind. Just build a damn phone with a good screen, good camera, good battery life and solid build quality. HTC's niche is build quality, and unfortunately they've been hit or miss in that respect. That cannot happen in the future. I cannot stress this enough! If HTC is to compete with Samsung, their direction should be to build solid, well-built phones. There are people like me who have absolutely no problem with Samsung's repeated use of textured plastic. However, there's also a world out there who find their phones a bit 'cheap' feeling. HTC should be the Apple (in terms of solid build quality) of the Android world. It should be clear cut - you buy a Samsung for these reasons or you get an HTC for these reasons. Right now, it's not even a discussion (for the masses at least).

 

[s44]

Going forward HTC could also definitely court the mod/ROM community better. The whole lock/unlock saga really set them back, and though they've mostly straightened that out, they still drag their feet like crazy -- arguably violating GPL -- on releasing kernel source. With Samsung doing day of/day before source drops, hiring Cyanogen, sending dev phones, etc., HTC needs to step it up.

It's of course true that a small fraction of users are into flashing, but these tend to be the folks who recommend and shape the perception of devices.