Once upon a time, not so long ago, HTC was the king of the Android roost within touching distance of the iPhone juggernaut. But with Samsung’s new Galaxy S3 beating HTC flagship One X 0n every benchmark, there seems to be little HTC can do to recover lost momentum.
The Taiwanese manufacturer recently revised down the 2Q forecast due to competition from the American and Korean giants, a weak Euro and production delays. HTC revised down second-quarter revenue to NT$91 billion (US$3.03 billion) from an earlier forecast of NT$105 billion. While the overall Android market share has been increasing steadily, HTC’s market share actually dropped for the first time this quarter from 8.9% in Q1 2011 to 4.8% in Q1 2012.
So why this sudden change of fortune?
It turns out there are three key reasons.
1. Strong Samsung Marketing. Samsung have really gone all out with the launch of Galaxy S3. Look at the lavish global launches including the one here in Sydney at Capitol Theatre complete with celebrity performers. The phone is splashed across all consumer media including a very Apple style television ad. HTC One X is nowhere to be seen except in a few dedicated mobile outlets and some outdoor advertising. The lesson here is that smartphones need to appeal to wide audiences across the country to gain real traction. HTC needs to broaden its appeal to beyond the ‘techies’ segment.
2. Strange naming conventions. Dream, Salsa, Magic, Sensation, Incredible…the list of HTC phone names has long been a dogs breakfast. The names give no indication about where each phone fits in terms of technology and pricing. To top it off, last year HTC released a number of almost identical spec phones with different names sold through different carriers just so that carriers could claim exclusivity for their particular phone. Thankfully someone put a stop to that.
Things are looking better in 2012 with the One series with a promise of some consistency. So far we’ve seen the One X, One XL, One S and One V.
3. Positioning. Compare HTC One X advertising to iPhone 4S or the Galaxy S3
HTC One X commercial – Features a bunch of skydivers taking pictures while in free fall. Main message is about camera capabilities.
Apple iPhone 4S commercial – Also talks about the camera and other features, but using cute kids with a focus on ease of use.
And finally Samsung Galaxy S3 commercial that out-Apples Apple. Piano music, lots of faces and talkining about benefits not features.
Clearly Samsung marketing teams have taken a conscious decision to move away from features and focus on benefits, as Apple has been doing all this time. Nokia take a similar approach with Lumia and “the amazing everyday” campaign.
HTC does have some punches of its own on the product front. The phones are always solid and well designed, HTC Sense UI is much better than Samsung TouchWiz and integrates more smoothly with ICS and the HD LCD displays are definitely the best out there.
But the question remains: Can HTC recover back to the heady days of Desire HD? While it is hard to make predictions in this ever changing smartphone market, Samsung and Apple have the top two spots pretty much stitched up. However better marketing and better channel engagement strategy may help HTC claw back some of that marketshare. But it is not an easy task – just ask Nokia and RIM!
Thanks Joe, for bringing in your perspective on this.