HTC, Motorola Making Fewer Android Phones as Samsung Pulls Away

 
 
By Clint Boulton  |  Posted 2012-02-06
 
 
 

Google (NASDAQ:GOOG) likes to boast that there are more than 200 million devices, including over 300 different types of smartphones and tablets, based on its Android operating system in the market worldwide.

But while consumers are dazzled and perhaps dizzy from the sheer volume of choices in front of them, Android OEMs who have practiced throwing dozens of devices against the wall to see what will resonate with consumers are scaling back their toy factories.

Motorola Mobility (NYSE:MMI) and HTC, which each reported disappointing earnings for the fourth quarter, have both vowed to make fewer devices in 2012.

Motorola CEO Sanjay Jha tipped the industry off to his company's plan in January during the 2012 Consumer Electronics Show, where he said the company wanted to make fewer phones and steer clear of "incremental innovation."

The reason? There's no profit to be gained from selling devices that are roughly the same. Jha should know. Motorola last fall released the Droid Bionic smartphone, a 4G LTE (Long-Term Evolution) device that looks, feels and performs like a better variation of the company's Droid X smartphone.

The company is also on its fourth flagship Droid device, with each one being only incrementally better than the last.

HTC is in a similar boat, launching devices such as the HTC ThunderBolt and HTC Evo 3D smartphone, a followup to the company's popular Evo 4G handset from 2010. HTC also launched the HTC Evo View 4G and Jetstream tablets.

HTC U.K. chief Phil Roberson told Mobile Today the company will launch a number of high-end devices this year. "We have to get back to focusing on what made us great€”amazing hardware and a great customer experience," Roberson said. "We ended 2011 with far more products than we started out with. We tried to do too much."

Even so, Barclays Capital said HTC will announce four new smartphones at the Mobile World Congress later this month.

Motorola and HTC have learned a valuable lesson. While smartphone users are a growing number, the market will only bear so many like devices. It's hard enough competing with Android handsets from different OEMs and Apple's (NASDAQ:AAPL) popular iPhone. Motorola and HTC needn't build devices that compete with each other.

Interestingly, while Motorola and HTC are scaling back device-making, top Android OEM Samsung is still pumping out phones at a ferocious pace.

The company launched its popular Galaxy S II line in the U.S. last fall, followed it up with the Galaxy Nexus Android 4.0 Ice Cream Sandwich handset, and is preparing the S III line for a launch later this year. The company recently unveiled some low-end models as well.

Samsung declined to comment for this story, but the company's behavior indicates it doesn't believe it's releasing too many phones.

Moreover, while Motorola and HTC have struggled financially, Samsung had a great hardware quarter, shipping 36 million smartphones alone. Still, Current Analysis analyst Avi Greengart said Samsung has too many variants as well.

"The problem isn't the "big" phone releases, like the Galaxy S, which is launched about once a year," Greengart told eWEEK. "The problem is the proliferation of variants on those big models. Samsung has three different Galaxy S II models just at AT&T alone€”a plain one, one with a sliding QWERTY keyboard and one with LTE."

"The proliferation of models means more consumer choice, but it also means choice paralysis, where consumers can't figure out which phone to buy (and sometimes just buy an iPhone instead). It also multiplies the challenges for vendors when it comes time to update the software."

Those challenges can lead to platform fragmentation, which has been an ongoing bugbear for Android, though perhaps not so serious as originally thought. Regardless, it's clear that Motorola and HTC are changing their approach to the Android device business this year, even as Samsung chugs along.


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