HTC Needs a Turnaround Plan: 10 Ways to Fix the Mobile Device Maker

by Don Reisinger

It’s an odd thing, but HTC has been unwilling to acknowledge that Samsung, arguably its chief competitor, has taken a dominant lead in the mobile space and has shown no signs of slowing down. As difficult as it might be for HTC, the first step in its turnaround is to admit that another company is doing a better job and trying to learn from its example. HTC can learn a lot from Samsung’s success.

HTC is embroiled in many lawsuits worldwide over mobile technology. Although the company has argued that it’s in the clear, it should get out of the legal messes as soon as possible. What HTC doesn’t need now is to waste money on litigation and try to win cases that have all proven unwinnable in other court battles. Move on and get back to the business of making smartphones, HTC.

After acquiring Beats, HTC fired a shot over Apple’s bow, indicating that its products would deliver the best overall sound quality of any device on the market. HTC also thought that the Beats deal could help it deliver a contender with Apple on ancillary audio hardware and, eventually, software. But that never worked out. Like Samsung, HTC needs to realize that it can never be Apple. It tried with the HTC One and Beats, but it failed.

One of the keys to success in the mobile space has been the integration of services with hardware. Apple and Samsung have both done it, as has Amazon with its Prime Instant Video, Kindle books and more. HTC should consider more software development and try to find ways to keep its customers locked into its services. It’ll be a hard sell, for sure, but if the offering is truly better, it’ll attract a loyal, albeit small, fan base.

One of the luxuries of being a third-party device maker is that you, as a company, can deliver devices on a wide range of platforms. So, perhaps HTC should get closer to Microsoft on the Windows Phone front and offer more devices for that platform. Perhaps, there’s also an opportunity with open-source operating systems, like Tizen. First and foremost, though, HTC should try to become Microsoft’s favorite vendor next to Nokia.

There’s something to be said for sticking with Android. Sure, the move hasn’t necessarily helped HTC over the past several years, but the operating system is easily modified and can be put into use on a wide array of devices. Although HTC should consider other platforms, for now, Android is still the company’s best friend.

HTC recently said that it plans to make cheaper smartphones for those on a budget. While that’s certainly a good idea, the company should also consider targeting developing countries. As Nokia’s Asha line has proven with its more than 1 billion devices sold, there’s a huge market for companies that want to target mobile phone buyers in developing countries. That’s why so many other firms are going there and why HTC should do the same.

Another move HTC is making is to reduce its expenses by a wide margin. Over the past several years, the company has been spending cash at a rapid clip, and it’s hurting both its cash flow and bottom line. HTC is right to re-evaluate how it’s spending money and attempt to reduce its expenses drastically.

Carrier relationships are an integral component in the success or failure of any company’s product. That’s why Apple spent so long wooing China Mobile and why Samsung has partnerships all over the globe. HTC hasn’t done as good of a job at forming those partnerships and ensuring that its products get near-top billing on store shelves. Over the next few years, carrier relationships could be crucial in reviving the HTC brand.

Outsourcing production is one of the top strategies HTC has clung to in its outlook for the future, and it’s hard to find a good reason why it shouldn’t. Producing smartphones on your own can be extremely expensive and cut into research and development costs. HTC is reportedly planning to partner with Foxconn or other firms to build its devices. It’s a smart move and one that should help the company get back to the business of focusing all its efforts on product design.