HTC, Losing Android Battle, Looks to Windows Phone 8: Report

HTC is hoping to rejuvenate its business with smartphones running Microsoft’s Windows Phone 8 software, Reuters reported Sept. 6.

The Taiwan-based smartphone maker made its name in the United States with Android-running devices such as the Droid Evo 4G and the Droid Incredible, but the tremendous success of Samsung’s Galaxy devices have worked to leave HTC and others with dwindling market shares. In April, HTC CEO Peter Chou acknowledged that the company was having a hard time competing in the United States and would shift its focus to European and Asian markets, where it has had a bit more success. Though it still continues to struggle.

Jason Mackenzie, HTC’s president of sales and marketing, told Reuters that HTC doesn’t plan to scale back its Android effort but to grow its Windows Phone offering alongside it.

“I feel very strongly we’ve got very concrete carrier support in every region around the world, including the United States, and I’m not talking about just one carrier,” Mackenzie said, according to the report. “Our plan is to go big on Windows 8.”

Nokia is for now Microsoft’s biggest partner in Windows Phone, which will launch during the fourth quarter. On Sept. 5 Nokia introduced two smartphones that will run the OS, the Lumia 920 and Lumia 820, though it hasn’t yet shared pricing or carrier information.

HTC’s change of strategy suggests how difficult it is to compete for U.S. consumers-a sentiment repeated by analysts in response to the new Nokia devices.

“Nokia has delivered a device that although not underwhelming serves to remind us how difficult the task of winning back mindshare in this space will be,” Lee Simpson, an equity analyst with Jefferies, wrote in a Sept. 5 research note.

Mackenzie suggested to Reuters that device makers have so far devoted their top design teams to their Android efforts and treated Windows Phone designs as more of an afterthought-a theory that Nokia would surely take exception to, but one that shows how HTC believes it can compete.

HTC’s phones haven’t been poorly executed-some reviewers have preferred the HTC One X to the Galaxy S III, which debuted around the same time and has been a hit, with more than 20 million sold within 100 days, Samsung announced recently-the HTC phones just haven’t sold well, given the degree of competition.

“We believe customers overwhelmingly choose the Samsung Galaxy S III versus the HTC One Series when purchasing higher-end Android smartphones,” Canaccord Genuity analyst Michael Walkley wrote in a Sept. 3 research note. “With increasing supply of the Samsung Galaxy III at all four leading U.S. carriers during August, our checks indicated weaker HTC One Series sales despite increased carrier promotions such as AT&T dropping the HTC One X to $100 versus $200 for the Galaxy S III.”

In August, HTC phones were among the three top-selling phones at AT&T, Sprint and T-Mobile, but each case lost out to either the Galaxy S III, the 10-month-old iPhone 4S or both.

HTC has forecast that its third-quarter sales may be down by more than 20 percent-an even more dour prediction than Wall Street expected.

Is the less-competitive Windows Phone market HTC’s better bet? Mackenzie says he’s figured out some things.

“It’s about being more bold,” he told Reuters.