Company promises to try to be more innovative to keep up with Apple and Samsung

"The worst... has probably passed. 2013 will not be too bad."

Terms like "probably" aren't the most reassuring phrases to be uttering to investors, but that's what HTC Corp. (TPE:2498) CEO Peter Chou said in a recent interview with The Wall Street Journal.

I. HTC Survives an Abysmal 2012

"The worst" was pretty bad.  Q3 2012 saw HTC's sales plummet an incredible 79 percent on a year-to-year basis.  Overall, the company's global market share (of all phones, including feature phones) slipped from 2.7 percent in 2011 to 2.2 percent in 2012.

HTC was far from the only player to struggle last year.  Other firms like Research in Motion, Ltd. (TSE:RIM) and Google Inc.'s (GOOG) subsidiary Motorola Mobility saw a continued bleed of sales.  But perhaps no company rose as quickly -- or fell as fast -- as HTC.

Now the firm is looking to get its groove back.  In his interview, CEO Chou emphasized that HTC must push out a number of "innovative" designs in 2013, to outdo his competitors.  While stopping short of saying his competitors like Samsung Electronics Comp., Ltd. (KSC:005930) and Apple, Inc. (AAPL) were more innovative in hardware or form factor, he did acknowledge that the market's top two players were out-marketing his firm.

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

"Our competitors were too strong and very resourceful, pouring in lots of money into marketing," he acknowledges, "We haven't done enough on the marketing front."

II. Pushing on With Superphones, New Markets

But he disputes the notion that HTC no longer has the resources to put out killer products.  He remarks, "Although we don't have as much money to counter [Samsung and Apple], the most important thing is to have unique products that appeal to consumers."

Mr. Chou firmly believes that HTC can put out better look, better featured phones than fellow Android-phonemaker Samsung or Apple.  The upcoming 5-inch Droid DNA -- the flagship Android phone of Verizon Communications Inc.'s (VZ) and Vodafone Group Plc.'s (LON:VOD) joint-subsidiary Verizon Wireless he views as one example of such a top-shelf product.

He views expansion into new markets as key to a turnaround, as well.  While HTC traditionally relied on U.S. sales, primarily, 2012 saw HTC relying on a boom in China to offset a bust in the States.  HTC saw its sales double in the Asian giant to 2.8 million units last year.  And HTC also benefited from stronger than expected sales of its Butterly smartphones in Japan (the Butterfly is the Japanese twin of Droid DNA).

HTC hopes the Droid DNA -- the U.S. version of the J Butterfly -- will wow consumers in 2013.
[Image Source: The Verge]

"One thing I'd learned from last year is to act fast and be responsive to market changes," the 56-year-old CEO comments. "We are being more flexible now. We are constantly fine-tuning our sales plans and position in various markets."

HTC can also take comfort in that it has finally set its legal drama with Apple behind it.  HTC is now locked into long term patent licensing agreements with Apple and Microsoft Corp. (MSFT), making it perhaps the most secure of the Android phonemakers patent-litigation-wise.

But HTC has a tough road ahead to restore its reputation as a premium handset provider.  The company will tip its hand to investors shortly, releasing Q4 2012 financials and its Q1 2013 forecast.

Source: WSJ

"We are going to continue to work with them to make sure they understand the reality of the Internet.  A lot of these people don't have Ph.Ds, and they don't have a degree in computer science." -- RIM co-CEO Michael Lazaridis

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