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Will HTC join the likes of RIM and Palm? The handset maker has gone from sales superstar to treading water

Even as the death knells sound for Research in Motion, Ltd. (TSE:RIM), the smartphone industry may be close to claiming another casualty.  Faced with slumping sales and unable to compete with slick handsets from Apple, Inc. (AAPL) and Samsung Electronics Comp., Ltd. (KS:005930), Taiwan's HTC Corp. (TPE:2498) is seeing shareholders jump ship as revenue and stock prices decline.

In 2010 and 2011 HTC was on fire.  Its handsets like EVO 4G propelled it from obscurity as a company who manufactured other companies' devices (an original device manufacturer) to an original equipment manufacturer (OEM) role.  Sales quadrupled in 18 months, and stock prices tripled.  At one point HTC was estimated to be the top smartphone seller in the U.S.

Then in late 2011, sales began to decline and profits plunged precipitously.  Today they stand 70 percent off their peak and HTC looks lost.  The company just released its chief financial officer Winston Yung and enlisted the help of ex-Goldman Sachs Group, Inc. (GS) financial veteran Chia-Lin Chang to salvage the leaking ship.

HTC Phone Quietly Brilliant
Quiet brilliance is no longer achieving success for HTC [Image Source: Reuters / Pichi Chuang]

While the shakeup may help HTC slightly on the financial front, the elephant in the room remains how the company can manage to attract customers.  Increasingly Apple versus Android has started to look like Samsung versus Apple, with fifth place HTC fading fast.

The situation may soon further deteriorate as Samsung has reportedly bumped its Galaxy S3 launch to May 3 in London, England.  HTC is reportedly scrambling to figure out what -- if any -- handset in its lineup can keep pace with Samsung's latest flagship entrant, which is virtually guaranteed to pack a gorgeous display, bleeding edge hardware internals, and slick packaging.

One thing's for sure -- with hungry players like Nokia Oyj. (HEL:NOK1Vlusting for a piece of HTC's rapidly gained market share, things are looking increasingly troublesome for the Taiwanese gadgetmaker.  It needs a new game plan -- and fast.


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Too many models
By gumbi18 on 4/17/2012 8:55:04 PM , Rating: 2
The problem with HTC is that they designed and manufactured far too many models during late 2010 and 2011. They spread their R&D thin across who knows how many models. Not to mention there was no way for them to effectively market all their models - the only thing they could market was Sense but that tanked because the software was a bloated mess before Sense 4.0.

Their change in direction earlier this year was a step in the right direction but there are still far too many models. Just look at the One X - there is an LTE version with a completely different SoC. HTC should have either used the Krait SoC and not had two variants or waited untill Tegra intergated an LTE modem. Why HTC developed esentially two different flagship phones at the same time is astounding.




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