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Print 48 comment(s) - last by TakinYourPoint.. on Nov 12 at 5:55 AM

Company yet again flip-flops as it bleeds cash and searches desperately for direction

After losing NT$3.5B ($118.9M USD) before taxes and NT$3.58B after taxes in Q3 2013 -- its first ever loss in corporate history -- HTC Corp. (TPE:2498) is riding on fumes and desperation.  Once the top-selling phone brand in the U.S., today the company is making dire sacrifices, vowing to cut a quarter of its total expenses and dramatically change directions in hopes of turning a small profit in Q4.

I. Down, Down We Go

The latest rocky quarter for the embattled Android OEM saw it jettison its 24.85 percent stake in Beats Audio for $415M USD.  That's not entirely a bad thing as HTC acquired a 51 percent controlling stake in Beats Audio for an estimated $300M back in 2011.  It later traded that for a smaller stake in Beats Electronics, and some cash.  Now it's yet again turning a small profit off the deal, which it says should amount to additional $85M USD in profit when all is said and done.

A stronger sign of desperation can be seen in HTC's decision to sell Saffron digital which it also bought in its 2011 heyday.  It paid $48.5M USD for Saffron at the time, but is making only $47M USD off its just-announced sale, along with the freedom to use Saffron's patented video delivery technology.

Beats by Dr. Dre
HTC sold its stake in Beats for a small profit. [Image Source: Hot New Hiphop]

HTC continues to shed employees and shutter facilities as well.  It expects to reduce operations to NT$10B ($339M USD) in Q4 2013, down from NT$13.1B ($445M USD) in the money-losing Q3.
 
 
Layoff notice
The pink slips have been flying at HTC, although it's been proactive and driven off many employees before it came to such unpleasantries.

HTC continues to struggle to find a strategy.  After saying last quarter that it was focused on building high end smartphones for the expanding Chinese market, where it has seen increasing success, HTC's new finance chief has abruptly announced that HTC instead would focus on a "broader" (read: low-to-mid range) lineup, stating, "We're looking at broader products in this quarter...we aim for higher volume into 2014 that will give better profitability."

II. Cutting Off its Arms and Legs to Save the Torso

If HTC indeed sticks to this plan, the HTC One and One Max -- high end, high quality, rather unique flagship Android phones -- may be the last of their kind in a sense, as HTC tries to fill lower spots on the food chain.

It's looking increasingly probable that HTC will adopt this approach out of necessity as it will likely have neither the engineering staff, nor the financial resources to design high-end Android handsets by the end of Q4 2013.

HTC 8S
The HTC 8S Windows Phone

Meanwhile HTC's revenue continues to plunge downward.  HTC made NT$60B ($2.04B USD) in Q4 2012 -- not exactly great.  But by contrast, HTC's new forecast has that bitter memory looking a lot rosier as it just predicted revenue would fall by as much as a third to NT$40B ($1.36B USD) to NT$45B ($1.53B USD) for the quarter -- below the previous Thomson Reuters SmartEstimates analyst estimate of NT$47.1B ($1.60B USD) and far below the NT$52.2B ($1.77B USD) estimate that 21 analysts surveyed by Bloomberg expected.  

Net profit is expected to move from NT$1B ($33.9M USD) in Q4 2012 to anywhere between a modest NT$1.41B gain ($47.9M USD) (NT$1.70 earnings per share) -- at best -- to a drop to NT$83M ($2.8M USD) at worst.
 

Sales of the HTC One Mini were limited by production problems in Q3 2013.
 
In other words since it began to struggle in late 2011 to early 2012, HTC has or is yet to shed most of its engineering staff and global facilities, in a survival attempt to reposition it as a maker of budget to mid-range phones.  HTC's massive cuts continue in Q4, as its operating budget suggests that it will cut a quarter of its total  expenses (employees, facilities, etc.).  

HTC smartphones

At best these sacrifices will basically keep HTC steady at a small profit in the tens of millions of USD.  At worst the phonemaker will essentially break even, an outcome only marginally better than last quarter's small, but historic loss.

Returning to the NT$10B ($339M USD) operating expenses number, remember that Q4 is a holiday quarter, which usually has much higher expenses (due to advertising, product, launches, etc.) than Q3.  Yet HTC plans to actually cut its expenses, an extraordinary effort that equal parts praiseworthy and insane.

One X Plus
HTC will likely climb down the stack with more budge fodder along the lines of the now-aging HTC One X+ [Image Source: Anandtech]

In Q4 2011, fresh off its dominance of the American smartphone space, HTC spent a whopping $NT63B on operating expenses.  If HTC completes its current cost cutting trajectory it will have one-sixth the budget it had in 2011.  It's hard to design great products, when you've fired most of your engineers and design staff.

III. Befuddled Marketing

HTC is currently spending roughly $1B USD to try to gain marketing ground in brand-sensitive smartphone market.  Marketing Chief Benjamin Ho offered no excuses for his and his company's poor performance, remarking, "Perhaps in the past we have not marketed ourselves that well.  We are in the process of tightening up and revamping a lot of things that we used to do."

Since Mr. Ho officially stepped aboard the leaking HTC ship in January, he's tried to recraft HTC's message of "quietly brilliant" designs into a brasher, more in-your-face marketing message.  

HTC quietly brilliant
HTC is no longer content to be "quiet". [Image Source: Reuters]

Taking to Twitter, he's exulted the HTC One and trashed the flagship devices of rivals Samsung Electronics Comp., Ltd. (KSC:005930) and Apple, Inc. (AAPL).  He also signed actor Robert Downey, Jr. to a multi-million dollar advertisement deal that yielded a set of cryptic, obtuse commercials that may have have drawn some attention that HTC still exists, but largely left customers even more confused as to why they would want to buy and HTC phone.

The generally pro-Android, pro-HTC staff at Android and Me summarized:

While HTC was the leader in the Android space for a few years, most people in the US didn’t know the HTC name. They were buying an EVO, a myTouch or a DROID. The new HTC “Change” ad campaign may be some people’s first introduction to the “Happy Telephone Company.”

It may not be ideal, but HTC would rather have people ask “Did you see that weird HTC commercial? What the heck as that?” than not have anyone talking about the brand at all.'  For now, the only word we can use to describe the full two minute commercial is “odd.” 



But from an investor perspective HTC's behavior seems even odder.  HTC's commercials proclaim "HTC, it's anything you want it to be" -- but customers don't seem too interested in wanting it to be anything.  And yet HTC's leaders still seem a bit at odds with the reality of just how dire the fate their facing is.

IV. HTC's Leaders Channel Their Inner RIM

A purchase by a strong rival OEM could benefit HTC's brand, employees, and investors if executed well.  And yet HTC Chairwoman Cher Wang -- reportedly the richest woman in Taiwan -- has publicly vowed to not sell HTC no matter how bad things look.  As Ms. Wang -- the daughter of billionaire former chairman of Formosa Plastics Corp. (TPE:1301), Wang Yung-ching -- currently owns an estimated 20 percent of HTC, there's little hope of a sale for now.

HTC may eventually sell, but it will be a tale like that of BlackBerry, Ltd. where poor leadership could have traded pounds of cure (and massive shareholder losses) for an ounce of prevention, had they been less prideful and sold sooner.  

Even the company's arguably most valuable leaders has become a detriment of late.  HTC CEO Peter Chou was a leader who exhibited a certain kind of bold brilliance that allowed HTC to rise from obscurity to be a market leader in an era where smartphone releases were more sporadic and less driven by brand.  But in the modern era where OEMs must compete quarterly with new product, at a faster, iterative chain of short spec hops, he's struggled to adjust to this new market reality.

Peter Chou
Once an asset, CEO Peter Chou has ignored his own promises and become just another denialist detriment. [Image Source: Reuters]

It was widely reported/confirmed by HTC staff that at a meeting of HTC senior management last winter, Mr. Chou told staff that the company would see one of two outcomes -- the HTC One would be a sales success, or he would resign.  Such a promise seemed the mark of a brave and thoughtful leader, a general willing to lead his troops personally to victory, or in defeat take the blame on his own back.

HTC fought perhaps its final battle for the high-end smartphone market and it basically loss.  Dennis Chan, an analyst at Yuanta Financial Holding Comp. in Taipei, Taiwan elaborates to Bloomberg:

Their profit driver for the quarter is HTC One Max, which is not a very competitive product.  HTC One was a good phone but faced supply chain problems, now HTC One max has no supply troubles yet it’s not a strong product.

The verdict is basically in for the One -- it was a great phone, but a sales flop.  And yet Mr. Chou seems to be going back on his word, lingering around and further eroding morale.  The one thing worse than a strong, trusted leader at a struggling company is a leader viewed as weak and untrustworthy in charge of a company that's also struggling for survival.

Peter Chou
HTC CEO Peter Chou was dealing up brutal honesty in a new interview.
[Image Source: Android and Me]

HTC has produced brilliant devices, but it's failed to execute when it comes to the supply chain. 

The best insight we've seen so far regarding HTC?  A top comment on its YouTube channel remarks that HTC should offer a new acronym retitling in a future commercial -- "HTC: Help This Company."

V. Icarus Dreams  

HTC's sales pinnacle was when it made the same kind of produt that today South Korean and Chinese Android OEMs are flourishing on -- entry level luxury devices that pack a lot of speed, but questionable design/durability.

As HTC was deplaced it tried to evolve.  And for those who continued to buy its devices like the one, it's attempt to ascend from plastic-laden smartphones like the HTC EVO 4G into the HTC One.
HTC BlinkFeed
The HTC One

In the end HTC's position made this an impossible dream, but boy did it try.  And that is what will taunt its remaining fans for years to come.  

The quality witnessed in its recent product could be leveraged, if only HTC had the patience granted by financial security to commit to radical changes without worrying about losing money.  Companies with deep cash piles have options.  They have the ability to radically reinvent themselves.  HTC's short stack leaves is one crucial reason why its bid to fly higher in terms of design proved an Icarus dream.

There is certainly a place for low volume, quiet brilliance as Android's Sony Corp. (TYO:6758), Windows Phone's Nokia Oyj. (HEX:NOK1V), Microsoft Corp. (MSFT), and iOS maker Apple have all shown. Apple's own sales are contracting offering yet another sign that the demand for high end devices is shrinking to lower volumes.  

VI. Market Gravitates Towards Cheaper Entry-Level Luxury Models

The mass market among consumers who can afford something better than budget/mid-range is gravitating towards cheaper entry-level devices where competition is reduced to a ubiquitous path of iterative hardware updates and flimsier, utilitarian designs packaged in low-cost plastics.  Apple's recent iPhone 5C suggests that Apple may leverage its market share to slowly transition to a wider line of cheaper product (design-wise) that still packs industry-leading high-end internals.

In today's market virtually all phones are made in China, thus it is not surprising that many of the new elite in unit sales come from this region, including The Lenovo Group, Ltd. (HKG:0992), ZTE Corp. (SHE:000063), and Huawei Technologies Comp. (SHE:002502).  

These companies all produce relatively similar flagship entry-level luxury products.  While there's slight tweaks to the size, color, or plastics used, if you chipped off the brand logo it'd be hard to tell a ZTE from a Huawei or a Samsung -- or vice versa.  This isn't just coincidence -- it belies the fact that there's certain materials and designs that are simply cheaper to produce, even if they don't meet the tastes of luxury buyers.
Nexus 5
But HTC's problems aren't merely that the market for such products are crowded.  It may seem equally close to the source of components (China, mostly), but recent supply struggles suggest that for some reason its relationship with components companies in China is failing.  It's unclear whether this is due to HTC own dysfuntionality (very posssble), underlying hostilities between China and Taiwan (most of the parts that HTC have been "snubbed" on were China source sensors), some source combination of both, or simply bad luck.  

Either way, the market for "entry-level luxury" -- devices with a high spec, but forgetable plastic designs -- is dominated by players with close ties to the Chinese supply chain.  So HTC either has to try to go up, become an even higher-end, lower-volume luxury product seller, or go even lower, dropping into budget and mid-range niches.

VII. High End Success Stories Required Assets HTC Lacks

In the end HTC's options are even more limited than that.

Some high-end product makers like Sony are succeeding in the face of the new market realities on the merits that there goal from day one wasn't to be top in unit sales, but to produce high quality product at a premium.  Others like Nokia have the market legacy (and again financial security, thanks to Microsoft) to reinvent themselves from higher volumes to a lower volume vendor that produces impeccable product.

When looking at recent U.S. market leader Apple, who fell to second in the U.S. in Q3 and has seen sales drop, you might be tempted to draw parallels to HTC.  But the late Steve Jobs' gift to Apple was that his company not only had a popular smartphone line, but also popular high-end computer, tablet, and music player product.  HTC just has phones, and that makes all the difference in the world as Apple made far more at its sales peak that HTC did.
 

Apple has far more resources than HTC, thanks to its diverse product line.

And Apple had a far stronger grip on the China-heavy component and device assembly chain that HTC; relationships that not only further accentuated its profitability at its sales peak, but which also offer it the option to become more like Samsung, Huawei, et al. should it want to be (as mentioned above).  Or like Sony, it could allow volumes to naturally contract, while sticking to its guns regarding high-end design -- an approach made possible by its other strong product lines (again, an almost identical story to Sony).

Apple's a lot closer to Sony in terms of trajectory than HTC.  And HTC's trajectory is a lot more like BlackBerry/RIM.

VIII. "As I Lay Here Dying" -- Why HTC, Like BB Can Run, But Reality Will Eventually Catch Up

HTC is rather unique in its position and struggles, and it has very little leverage to remain in the profitable luxury space -- either on the high-end or entry-level luxury end.  

Reality has compelled HTC to exit its brief stay in the superphone market, thus expect a weaker HTC to hang on as a player in the budget to mid-range field, with maybe even the occasional phone with a cheaper design but high-end spec.  But it's doubtful that HTC can even hang on there, as the entry-level luxury players like Huawei and Samsung funnel their aging product downwards into that space, while having much stronger brands to tempt budget buyers.

Circling the drain
Like RIM, HTC has been circling the drain for some time now. [Image Source: Business Dev.]

The strongest likelihood, I believe is that HTC will go the way of BlackBerry, not merely because of its bold, but flamboyant dreams or failing leadership, but because it's hard for company without large financial backing to radically evolve.

Thus expect HTC, much like RIM/BB to continue to struggle in a lazy downard spiral as its management and owners refuse to renounce leadership, refuse to sell, and overall simply refuse to acknowledge the unpleasant, but urgent face of reality.  This will almost inevitably continue on until the day when things get so dire that they look at their shell of a company and their long-scorned former friend reality delivers them a stiff right cross to the face.
BlackBerry and HTC are looking a lot alike these days.

When this dose of reality hits I expect HTC will reverse course yet again and agree to be begrudgingly bought up (or like BB receive a controlling "investment" from a third party -- still more or less a purchase).  

Bury head in the sand
You can only deny reality so long...  [Image Source: Reading Remy]

A sale of some sort would allow the HTC brand to live on as entry-level luxury product for a company like Huawei or ZTE (who might opt for this approach as a route to placate U.S. customers and federal regulators who are hostile to Chinese OEMs), or as some sort of hedge fund owners' dream to own an OEM.  In the former case HTC may still be a market name for years to come, while in the latter scenario, it will likely churn to a final death (as Palm did).

Either way, know this -- HTC's days of producing beautiful product like One are coming to a close.

Sources: HTC [PDF], Bloomberg Businessweek, Reuters



Comments     Threshold


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Nice article, but some facts are wrong
By melgross on 11/5/2013 8:29:43 PM , Rating: 3
Two things. One is that iPhone sales haven't fallen. I don't know where that idea came from.

Secondly, it's been shown that it was Samsung that made it difficult for HTC's supply lines. Samsung was also fined by Tiawan for hiring bloggers to lie about HTC. This isn't surprising to learn about Samsung.




RE: Nice article, but some facts are wrong
By Motoman on 11/5/2013 8:39:05 PM , Rating: 5
Apple's patent trolling struck the fatal blow back when they got HTC imports banned for a while, right when HTC *should* have been grabbing big marketshare.

It's taken a while, but ultimately that will be the mortal wound.


RE: Nice article, but some facts are wrong
By w8sk on 11/5/2013 9:16:57 PM , Rating: 2
Yea no kidding. To chalk it up to a few "blog" posts as HTC's downfall and Samsung's big "play maker" is really stretching it. I bet not even 1% of the total buyers have even read any of those unknown blogs. If a techjunkie like me didn't read any of them, even by chance. What makes you think most of the average buyers would've.

The damage was done when Apple got a ban on HTC during the most biggest growing times for the Android platform. It was when the smartphone market was booming the most.

Now HTC is playing catch-up after losing their edge on being the most popular brand when Android was up and coming. Look at them now, pushed into the back burner where it will rot away like Blackberry.

In this fast paced technological market, even a 6 months delay can destroy an entire product line or be made obscure, because the new "it" items are already out by then.

Samsung merely played as a strong competitor. (Samsung has more money to out market/out produce HTC anyways) It was Apple who fucked HTC over.
HTC may be a big company, but its not as big as companies like Samsung. HTC can get fucked over even from a temporary item ban while Samsung can at least survive through such onslaughts.

Fuck Apple.


RE: Nice article, but some facts are wrong
By StevoLincolnite on 11/5/2013 10:13:24 PM , Rating: 4
The bright side of all this (If you can call it that) is HTC could be ready pickings for a competitor such as Microsoft to pick them up and push Windows Phone harder.

My god though, I'm surprised Apple hasn't paid for it's anti-competitive behavior towards HTC, it's downright wrong.
We need more "little" guys such as HTC for added competition, would suck if we were left with only a duopoly in the end.


RE: Nice article, but some facts are wrong
By idiot77 on 11/6/13, Rating: -1
By damianrobertjones on 11/6/2013 5:04:36 AM , Rating: 5
This is ALL in your opinion.

Please learn to spell awful.


RE: Nice article, but some facts are wrong
By Cerin218 on 11/6/2013 5:56:21 PM , Rating: 2
Well, after that thought out, well defined argument of WHY Windows Phone is trash, I will ditch mine instantly. Oh wait, you didn't give any reasons. I'll stick with my Windows Phone. I'm not an iSlave, and HATE the iPhone work makes me carry, if nothing else simply for battery life and I won't touch iTunes. And Android is following the same path as Linux and is clunky. My Windows Phone is terrific. Wish it had a few more apps, but everything else I really like. It's a great system. If people aren't using it, it's their loss. Same as the morons that hate Windows 8 for stupid reasons. Apparently I'm one of the few people on the planet that can get 8 to do what I want how I want. But more power to you. Haters gonna hate.


RE: Nice article, but some facts are wrong
By Kiffberet on 11/7/2013 7:40:23 AM , Rating: 1
DT should change it's name to DH - Daily Hater - Where iHaters from around the world can flock to do their daily hatin'.


By retrospooty on 11/7/2013 5:33:52 PM , Rating: 2
RE: Nice article, but some facts are wrong
By Mint on 11/5/2013 10:20:07 PM , Rating: 3
Six months? It was a 1.5 month ban:
http://www.pcmag.com/article2/0,2817,2405411,00.as...
April 19th 2012 to June 2.

HTC's market cap, market share, and revenues had already gone down drastically by then. Apple's patent trolling is awful for the industry, but it isn't anywhere near the primary reason for HTC's downfall.

Jason provided much more plausible reasoning.


RE: Nice article, but some facts are wrong
By w8sk on 11/5/2013 11:42:11 PM , Rating: 2
I didn't mean 6 months for HTC. That was just a general comment to emphasize how a few months to half a year can have a large effect.

Yes, even the 1.5 month will have a detrimental effect on HTC. And I doubt it even went as smoothly as it looks like on paper. It probably took additional resources/time reorganizing/reshipping the products.

Products can take a while to design, set up manufacturing newly designed phone molds and internal hardware.
Putting a delay on your competitor (especially for smaller companies like HTC) will upset the normal cycle of their design/process/manufacturing timeline.

In the end, my point is (to OP). Apple has dealt actual harm and damage to HTC than anything Samsung has put out. And that damage had a more substantial impact since it affected a smaller company like HTC.


RE: Nice article, but some facts are wrong
By Reclaimer77 on 11/6/2013 12:26:39 AM , Rating: 2
quote:
It was a 1.5 month ban:


Do you know how many flagships get sold in a month and a half? That was a VERY big deal for HTC to have those phones sitting on a dock instead of being sold.

Apple and Microsoft have just about killed HTC. The idea that a few allegedly paid bloggers can take down a whole company is the dumbest shit I've read on here.


By themaster08 on 11/6/2013 1:56:12 AM , Rating: 2
quote:
The idea that a few allegedly paid bloggers can take down a whole company is the dumbest shit I've read on here.
It worked for the Xbox One. Almost every feature of the Xbox One during the announcement has been reversed due to bloggers backlash.

The voices of vocal bloggers can have a significant impact. Before you get on your soapbox and insult me, I'm not saying that it is necessarily the case here, but there's no doubt that a smear campaign against a company can have a negative impact. Add to the fact that HTC was already being targeted, I'm sure it didn't help their situation.


RE: Nice article, but some facts are wrong
By YearOfTheDingo on 11/5/2013 11:24:55 PM , Rating: 2
Competing when the market penetration of smartphone is 15% is rather different from competing once it has gone over 50%. While merit alone can win over early adapters, to capture the attention of the general public you need marketing and brand recognition. HTC was never going to succeed for long as an independent company. It should have either sold itself or merge with a company with a more established brand.

Market consolidation always happen when a product market category matures. You can either cash in while you have a chance or get run out of town eventually.


RE: Nice article, but some facts are wrong
By Samus on 11/5/2013 11:36:18 PM , Rating: 4
The fall of HTC is really a great example of Apple's anti-competitive behavior on the industry. Killing a key competitor (especially when it comes to beautiful aesthetics and industrial design) by bribing Customs and later the FTC to illegally hold HTC's products at a critical moment was the first in a chain of blows to the company. The lost revenue trickled into engineering shortfalls, lack of advertising, and so on.

Apple did to HTC what Intel did to AMD during the Netburst-era. The sad thing is, Apple got away with it, when at least Intel was found liable for *cough* just a billion dollars.


By kmmatney on 11/6/2013 3:09:19 AM , Rating: 1
HTC killed themselves by putting out crap a few years back. Biggest mistake I ever made was getting my wife the HTC EVO 4G - the "iPhone killer" that everyone hyped up. It was utter crap, and made me never want to buy an HTC phone again. They were already a sinking ship before they started putting out phones with great industrial design like the One.


RE: Nice article, but some facts are wrong
By danbob999 on 11/5/2013 11:57:55 PM , Rating: 3
HTC made a bad decision by trying to go head to head against Samsung.
Samsung offer the Galaxy S3/4, HTC has One X and One.
Samsung offers the Note 3, HTC has the One Max.
Specs are often very similar, but Samsung has a slight performance advantage (especially Note 3), and a big one on carrier adoption.
Unfortunately it's a world were there is not much room for second best.

Instead, they should have tried something different. Like a high end, 720p 4-4.2" phone maybe. Samsung doesn't have one. The One mini is too little and most importantly too late. They could get some market from the iPhone which such a device.

They could also be the first manufacturer to support its devices. By pledging updates for at least 2 years. If they stick close to AOSP, it shouldn't be hard. They shouldn't waste effort reinventing Android. A few apps should be enough. They could put them for free on their phones and sell them on the play store.


RE: Nice article, but some facts are wrong
By TakinYourPoints on 11/7/2013 12:23:30 AM , Rating: 4
The most important things aren't on this list: Marketing and branding.

http://static4.businessinsider.com/image/50b928286...

Samsung outspends every single tech in marketing the Galaxy line by a significant margin. Last year they outspent Apple and Microsoft's marketing budgets by several times. They outspend Coke of all brands.

That is absolutely massive, and I have no idea how HTC can compete with that. HTC can put the best specs in the best device and it wouldn't matter because Samsung has global reach that they can't hope to match.

Something else HTC and many other handset makers screws up are naming schemes and branding. There is little consistency with HTC, LG, Moto, etc.

Samsung did something super smart just by naming it GALAXY.

Most people don't look for Android phones, they want a Galaxy. Simple, powerful, and easily remembered, not nonsense like most other companies do: http://androidphonenamegenerator.com/

Sticking to something simple gave Samsung a powerful and iconic brand. Brands are what sell. Who the hell can remember a flagship line when its name changes annually?

quote:
They could also be the first manufacturer to support its devices. By pledging updates for at least 2 years.


Wouldn't that be nice. As it stands a Galaxy Nexus from barely two years ago won't be getting Kit-Kat :/


By Reclaimer77 on 11/7/2013 2:37:41 AM , Rating: 3
This is what I was trying to tell those Windows Phone wackos the other day. Nokia's absurd numbering scheme is incomprehensible to the average consumer and is a marketing fail. "Galaxy" is ubiquitous, snappy, easy to remember and instantly identifiable.

quote:
That is absolutely massive, and I have no idea how HTC can compete with that.


Well for starters they could have taken every penny wasted on that goddamn stupid Facebook phone, and did something else with it. ANYTHING else lol.


By Philippine Mango on 11/7/2013 4:42:30 AM , Rating: 2
I might consider purchasing the HTC one if it didn't have the constraints such as an all Aluminum body which not only restricts signal but also doesn't have a removable battery nor external memory card. Why am I spending so much money on a phone that lacks such basic features? Also another disappointing thing about the HTC one is that the signal quality is worse (as stated before) than the S4. I keep finding excuses for why I don't want to buy a Galaxy S4 as it doesn't have the FM radio I want but in my testing and use of it (my mom has one) I've got to say it's a pretty damn good phone. I can actually make phone calls with this phone in places where an HTC One or just about any other phone except a blackberry 9000 can't.


RE: Nice article, but some facts are wrong
By JasonMick (blog) on 11/6/13, Rating: 0
RE: Nice article, but some facts are wrong
By BSMonitor on 11/6/13, Rating: 0
By JasonMick (blog) on 11/6/2013 11:02:00 AM , Rating: 2
quote:
LMAO

Pot, kettle.. Kettle, Pot
Nope.

Every piece of my analysis is extensively sourced.

He made a big claim (that Samsung was blocking HTC from receiving components) and I invited him to back it up.

You're being childish. Try to contribute something useful to the discussion.


RE: Nice article, but some facts are wrong
By BSMonitor on 11/6/13, Rating: 0
RE: Nice article, but some facts are wrong
By JasonMick (blog) on 11/6/2013 11:15:28 AM , Rating: 1
C'mon do I have to hold your hand and walk you through basic math and financial analysis?

Linear regression on this year's Q1-Q4 (2013):
y = -1.87 x + 35.78

A -187% differential growth rate in 2013 in iPhone unit sales and you say nothing is wrong? Wow, talk about denial.

Q1 saw 47.8 million sales.
Q4 saw 34.0 million sales.

http://www.apple.com/pr/library/2013/10/28Apple-Re...
http://www.apple.com/pr/library/2013/01/23Apple-Re...

Can you say "denial"?


RE: Nice article, but some facts are wrong
By BSMonitor on 11/6/13, Rating: 0
By BSMonitor on 11/6/2013 12:58:46 PM , Rating: 2
Sorry, that means consecutive financial quarter growth does not reflect the sales trend. You must compare current quarter to last year's quarter.

Don't worry, everyone knows your agenda.. You aren't helping yourself by slamming Intel and Apple in every related post.


RE: Nice article, but some facts are wrong
By JasonMick (blog) on 11/6/2013 3:53:35 PM , Rating: 2
quote:
The business model for Apple is cyclical.
You're reading it wrong.

http://www.iclarified.com/images/news/31906/130567...

Their business model is cyclic, but growth used to continuous QoQ in the Steve Jobs era.

Since Tim Cook took over Apple's continuous growth has been replaced by the much choppier cyclic rise and fall you suggest. That is not a good thing. And it's a major reason (in addition to the slide in profit) why Apple's stock has been pushed down to nearly half its peak value.

Between 2009 and 2011 Apple experienced a virtual linear upward growth posting gains in nearly every quarter. In 2012 and 2013 it's seen jumps in Q4 (after the release), but then declines in subsequent quarters... this is a new model and a sign of contraction, in that Apple cannot sustain growth on a QoQ basis for the entire year.


By TakinYourPoints on 11/12/2013 5:55:38 AM , Rating: 2
Why on earth are you looking at quarter-over-quarter when year-over-year is the relevant metric here?

Apple's YoY growth continues to accelerate. If we're only looking at high end smartphones the iPhone has both the fastest growth and the highest sales YoY. Samsung's high end lines have stalled in comparison while HTC and LG's have actually contracted YoY.

You're also ignoring the fact that the same cyclical patterns apply to all of these other companies. Saying that iPhone sales have slowed while they've grown faster than anyone else in the high end, while also ignoring even greater slowing in the high end from Samsung (the only Android manufacturer doing well) is strange.


By crimsonson on 11/6/2013 10:44:57 AM , Rating: 2
Sheezaz, you are such a hack.
This is terrible punditry (because you are not a journalist right?).


By TakinYourPoints on 11/7/2013 12:05:51 AM , Rating: 3
HTC isn't the only company who's high end sales have had a hard time. LG's high end sales plummeted. Motorola continues to have problems there as well. Samsung is the only company that is doing well in the high end, and their high end sales have more or less stalled. What made up almost half their sales last year is going to be about 1/5 of their sales this year. Low end hardware is where all growth is in Android right now.

Make mention that most Android activations are on low end hardware, using sales figures and online metrics to back this up, and the Google/Samsung defense force comes out to contest reality. Its really weird that they can't just enjoy what they like, they also need "marketshare" and "sales" to validate their choices.

Damn shame HTC is backing out though, their hardware is really nice.


HTC Sense
By ipay on 11/6/2013 4:10:52 AM , Rating: 2
Because of my experience with a phone incrementally crippled by HTC Sense, I have zero interest in owning another HTC product.




RE: HTC Sense
By piroroadkill on 11/6/2013 4:36:48 AM , Rating: 2
It's funny, because now I have a non-HTC device, I kinda miss sense.

It has a great sense of showmanship.

The Sense 3 launcher with a nice custom ROM I loaded onto my old HTC Desire is so, so smooth, and the animation for pinch and zooming the pages is smooth and progressive.


RE: HTC Sense
By ipay on 11/6/2013 9:39:59 AM , Rating: 2
I'm glad your experience was better than mine. Without the custom ROM, I wonder what your experience would have been. That might have made all the difference. <shrug>


RE: HTC Sense
By bug77 on 11/6/2013 10:30:51 AM , Rating: 2
If you had to choose between Sense and your custom ROM, what would you choose?


RE: HTC Sense
By Monkey's Uncle on 11/6/2013 12:39:48 PM , Rating: 2
If Sense is so good, why you using a custom rom?
That doesn't make an awful lot of ... sense ... to me.


Oh HTC...
By lawrance on 11/5/2013 10:22:48 PM , Rating: 2
You don't make money chasing the bottom feeders who are looking for free phones. You make money by innovating. By making your products better than your competition.




RE: Oh HTC...
By bug77 on 11/6/2013 10:33:03 AM , Rating: 2
Tell that to Ferrari and Volkswagen.


Things HTC should have done
By Gunbuster on 11/6/2013 12:02:49 AM , Rating: 2
They should have offered the 8X in all colors for all carriers, then gotten really aggressive on pricing with it.

After that they should have followed up with a cost downed model Windows Phone 8 handset because it runs like a champ on low end gear. (Oops, Nokia beat them to that with an $80 Lumia 52X)




By TakinYourPoints on 11/7/2013 12:07:41 AM , Rating: 2
The 8X is a REALLY nice piece of kit, I actually like it more than the Lumias


HTC in better shape than OCZ
By EricMartello on 11/5/2013 11:03:31 PM , Rating: 3
As far as tech companies that are imploding, I'd say that OCZ is high on that list. It's stock took a dump from over $2 per share down to about $0.45 cents today after releasing a "worse-than-expected" earnings report. At least HTC has some real assets and intellectual property - OCZ is mainly just a marketing company / brand.




Common Sense
By Dug on 11/6/2013 12:28:16 PM , Rating: 3
The downfall is common with leadership that doesn't use common sense.

1) There's only so many phones you can sell. Don't set unrealistic sales goals.
2) Don't expand so quickly. Hiring thousands of people is not going to guarantee growth.
3) If you do have a good year, save your money and invest in new products. Don't spend it on new buildings and fancy boardrooms to help your ego.
4) Fire people that are incompetent. Like their marketing team.
5) Listen to your customers.




By Ananke on 11/5/2013 10:20:15 PM , Rating: 2
HTC tried to differentiate with software changes, and it didn't update its phones with newer Android or Windows updates. Two things:
1. The smartphone industry peaked in the beginning of 2013, since than the market is saturated and slowly contracting /I know it from market metrics, professionally/. Today, the users are looking for unification, not differentiation, of the software.
2. The software platforms are evolving rapidly and they need to be up to date, in order users to be able to use them. Customers prefer to upgrade software instead of spending money on hardware. Instead HTC was deliberately not providing updates and alienated everybody.
Verdict: they are dead as phone manufacturer, unless they go to the MS Windows campus. The Android platform is already taken by Korean and Chinese companies and it is rapidly price decreasing to the bottom type commodity market, i.e. consolidated stage with two or three players at max.




Advice to HTC...
By milktea on 11/6/2013 12:20:52 AM , Rating: 2
Drop the 'beats' audio non-sense, and put in something that will truly satisfy the audiophiles. For example, look at the Astell&Kern AK120. This allows differentiation from competitors, which HTC might have a chance to take away certain markets.




A better acronym
By The Von Matrices on 11/6/2013 6:05:29 AM , Rating: 2
For all HTC is trying to redefine its acronym in that ad, I'm sure there are many more appropriate acronyms for HTC.

Huge Technological Collapse?




The problems.
By mxnerd on 11/7/2013 2:15:41 AM , Rating: 2
1. HTC One aluminum case cost too much and too slow to manafacture.

2. HTC can't secure components in time and volume and have too many quality issues (especially the camera). Components quality issues eventually cost them to take customers' return and cost them a bunch to repair failed components (purple tinted cameras). And components issues also prevent HTC to deliver One in volumes when it was released. Just look at how slow it deliver HTC One to Verizon. Missed too many opportunities.

3. HTC One has no microSD and no replaceable battery, which forces a lot of HTC lovers to Samsung.




they needed to......
By Bubbacub on 11/6/2013 6:26:39 AM , Rating: 1
make phones that customers want at a low price - not make phones that gadget reviewers want at a stupid price.

no one was ever going to spend iphone money on a htc product.

all they needed to do was make a light phone with a good SOC, a great screen, good removable battery and cheapish plastic case i.e. exactly what samsung have been doing the last three years.

if they had ditched their crappy sense software stack, stuck with AOSP and priced their flagship phone at just above nexus prices then they would have flourished.

instead they are going down......




"What would I do? I'd shut it down and give the money back to the shareholders." -- Michael Dell, after being asked what to do with Apple Computer in 1997














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