HTC Is Withering Away in the Mobile Market: 10 Reasons Why

 
 
By Don Reisinger  |  Posted 2013-04-08
 
 
 

HTC Is Withering Away in the Mobile Market: 10 Reasons Why


HTC is one of those companies that most technology lovers know about, but few actually care about. Sure, it’s nice to see the company’s new products pop up at Mobile World Congress each year.

And from time to time HTC mobile devices really do deliver something special. But in a mobile market dominated by companies like Apple and Samsung, HTC’s products get lost in the crowd.

Nowhere is that more apparent than in the company’s recently announced financial performance for the three-month period ended March 31. According to the company, its profit hit an all-time low of $2.8 billion, a staggering 98 percent drop compared to the same period last year. Revenue was down 37 percent, and was well below the company’s guidance for the quarter. Meanwhile, the company lost about half its market share between 2011 and 2012, leaving the mobile maker wondering how it can reverse its fall. It also left investors wondering if HTC deserves their support.

Unfortunately, it might not. HTC was once an important, growing company in the mobile space. But now, it’s an after-thought. Despite its recent deal with Facebook, it looks like there is nothing on the horizon that will reverse the company’s fortunes.

These are the reasons why HTC is dying:

1. The brand isn’t there

HTC’s branding leaves much to be desired. The company was once one of the leading Android handset makers in the business. But now its brand doesn’t carry any weight with smartphone buyers. Any company is in serious trouble if its brand isn’t respected. It means that a company’s products will be ignored even if they are good quality. That seems to be the case with HTC these days.

2. One misstep and that’s all she wrote

HTC had a strong 2010 and part of 2011, but the company lost its footing with some ill-fated devices in late-2011 and 2012. Now, HTC is trying to regain its lost market share with help from products like the One. But so far, consumers and enterprise users have proven unwilling to give some mobile companies a second chance. And HTC appears to be one of those companies.

3. Samsung is too big

Samsung is a serious threat to HTC. The company is delivering products that aren’t so dissimilar to those from HTC, but because it’s so much bigger than HTC, the Taiwanese company is at the bottom of the heap looking up. Samsung is simply too big and too powerful for HTC to catch up easily.

4. The lawsuits helped Samsung

This might sound odd, but all of the lawsuits between Apple and Samsung seemed to have helped the Android handset maker. After all, both companies have been battling for years over patents, and those stories have been big news. By suing Apple, Samsung legitimized its business. Although HTC is in its own legal struggles, they don’t do anything to help the company from a PR perspective.

HTC Is Withering Away in the Mobile Market: 10 Reasons Why


5. Specs obviously don’t matter as much

It’s hard not to be impressed with some of the devices HTC is showing off. The company’s One handset comes with a large screen, a powerful processor, and an overall decent design. Yet, consumers don’t seem to care. Maybe in the Android market competitive specifications don’t matter as much as HTC thinks.

6. Does HTC understand the U.S. market?

It’s not clear whether HTC truly understands the U.S. market. In a recent interview, the company said that it was planning to partner with celebrities in the U.S. to help market its products. Yet, there’s been no indication in the mobile space that celebrities can help sell mobile phones that aren’t already selling well. Is HTC just grasping at straws?

7. The financials are out of whack

The financial performance at HTC is something that the company truly needs to worry about. As noted, HTC watched its revenue slide 37 percent and its profits by 98 percent in the last year, alone. Meanwhile, its expenses are not being managed properly. HTC’s financials are out of whack.  Something needs to be done to address them—quickly.

8. The Facebook deal seems lopsided

HTC and Facebook last week announced a collaboration in which the social network’s new Home platform would be central to the handset maker’s First device. Although that should get First some attention, leaked photos of Facebook Home already show it running on Google’s Nexus. When Facebook Home launches on Apr. 12, it will be fully capable of running on other devices. That’s a problem for HTC because it was presented sort of as an exclusive deal that isn’t exclusive at all.

9. Supply chain management is a problem

HTC’s poor performance in the first quarter of the year was due in large part to its inability to get the One to store shelves at the beginning of March as planned. HTC blamed the problem on a shortage of camera components and will now launch the handset on Apr. 19. But in truth, HTC should have been managing its supply chain more effectively and been ready to address any issues. By not doing so, it’s put itself in a bad position.

10. It’s hard to get noticed

Looking around the Android marketplace, it’s clear that getting noticed isn’t exactly the easiest thing in the world for any company. There are literally dozens of new Android handsets hitting store shelves every few months and only Samsung’s get top billing in carrier stores. It’s hard to get noticed in today’s marketplace. And HTC is losing because of that.

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