HTC, the one-time king of the Android phone makers, is on a downward course with few options left to correct itself.
Last November, Business Insider’s Nicholas Carlson wrote that HTC was the biggest tech business disaster in 2012. Things have only gotten worse for the company since then.
This past quarter, net income was down 83% from the year before. That’s a huge disappointment considering the fact that it was the first full quarter during which the company was selling its best phone ever, the HTC One.
It’s not as if the company’s fall is due to a failure to produce top-notch devices.
HTC made the first Nexus phone for Google back in 2010, which was considered by many at the time to be better than the iPhone but failed because Google didn’t want to sell it through the carriers. A few months later, HTC released the Evo 4G, the phone that started the trend of large-screen Android phones and introduced us to high-speed wireless data.
HTC even beat everyone to releasing a 4G LTE device, which has data speeds that can be as fast as your cable modem, with the Thunderbolt. That phone even outsold the iPhone on Verizon for a brief period of time.
So what the heck happened?
Well, HTC messed up its launch of the best Android device of 2012 by only releasing it on AT&T. While the One X was a fantastic phone, its variants on T-Mobile and Sprint left much to be desired and it didn’t even come out on Verizon.
Meanwhile, Samsung had its Galaxy S III on seemingly every carrier out there and spent four to six times as much as HTC on marketing. A better device won’t sell if no one knows about it.
HTC’s drop in sales in 2012 was so huge that it drove down the company’s margins. It simply couldn’t order as many devices from its factories, so costs went up.
As reported by Eva Dou at the Wall Street Journal, one way for HTC to get out of this mess would be to merge with another device manufacturer. Analysts suggest Chinese companies like Huawei or Lenovo as the best options, but those mergers will almost certainly never happen due to the political problems between China and HTC’s home country of Taiwan.
But besides that, why would anyone want to merge with HTC? Eva suggests that a company might invest in HTC for its brand, but that doesn’t make much sense when the brand in question is utterly failing.
Every single indicator for HTC’s performance is trending downward. Via Benedict Evans, here’s its revenue over time:
— Benedict Evans (@BenedictEvans) August 5, 2013
From Sameer Singh at Tech-Thoughts, HTC’s shipments and market share:
This is all reflected in the performance of HTC’s stock:
There isn’t an obvious route for HTC to take going forward. For now, it seems to be staying the course by offering a line of flagship devices based on the One.
However, it looks like HTC is taking its time on executing that strategy: we still have no idea of when the HTC One Mini will come to the U.S. and The Verge’s Aaron Souppouris doesn’t expect the big-screen “phablet” version to be officially announced until September. That just happens to be the same month that Samsung will announce the next generation of its Note line of big-screen devices.
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