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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 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



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switch sides?
By Nortel on 1/4/2013 2:52:35 PM , Rating: 1
Interestingly enough this presents a unique opportunity to FULLY get in bed with Microsoft (HTC already makes two WM8 devices the 8X and 8S). If HTC started getting more subsidies from MS, as Nokia received, it could benefit both companies. MS could drive their market-share with another hardware player solely creating MS devices in the market while HTC would receive greater guaranteed revenue directly from MS while also receiving normal hardware sales.

HTC has for far too long been in a me-too situation in producing products akin to Samsung/Motorola/Acer/Asus/LG, etc... all built surrounding Android. If you take a look at how many different Android devices HTC has produced, it is no wonder they are tanking, they have no direction!




RE: switch sides?
By nafhan on 1/4/2013 3:29:53 PM , Rating: 3
Not really. It sounds like a plan to make them a niche player on a niche OS, with the company surviving almost entirely on payments from MS (assuming MS was even willing to do something like that).

They'd be in a worse position than Nokia, and this is a scenario that has not worked out all that well for Nokia!


RE: switch sides?
By bigboxes on 1/5/2013 11:01:42 PM , Rating: 2
Survey says!.... XXX

You have no clue and no experience with HTC great phones. They are tanking due to their size and Apple's influence. They've made patent agreements with Apple and Microsoft so that they can get on to business. The only thing they are lacking is the $$ to market their goods. My neighbors both asked what my wonderful android phone was. HTC baby!


RE: switch sides?
By Paj on 1/7/2013 8:38:24 AM , Rating: 2
I think a major problem for HTC is Sense. Its probably was the best manufacturer skin out there during the Gingerbread days, but the version they put on the Sensation was a horrible, bloated mess. It is visually inconsistent with the underlying Android 4 UI, and updates take far too long to roll out. Coupled with their mediocre battery life, its having a negative impact.

I believe HTC should streamline Sense, stop making so many different models (One S, V X, X+, XL etc etc), and work on improving their battery life - this should hopefully turn things around for them.


Their phones need bigger batteries
By BifurcatedBoat on 1/4/2013 4:25:19 PM , Rating: 2
I know, batteries are bulky, heavy, and expensive. Moto is finding a way though to pack 3k+ mAh into normal sized phones. HTC needs to figure out how to do the same if they want to come back.




RE: Their phones need bigger batteries
By seamonkey79 on 1/4/2013 4:42:00 PM , Rating: 2
That's the thing... their phones are great, but the battery life is just sad. I had an Eris, an Incredible and now have the Rezound, but I just can't handle being tied to a plug or carting extra batteries or an extended anymore. Picked up a Note II, which has as much battery as the Rezound's extended...

If they can get better batteries in there, I'll be back. Their cameras are better, antennas tend to be better, but their batteries are pathetic.


By Omega215D on 1/5/2013 8:19:17 AM , Rating: 2
The Droid DNA's battery lasts a good amount (on par with GS III) considering and I have no problems making my Rezound last more than a day of moderate usage and 10 - 15hrs moderate to heavy usage w/ stock Sense and battery.

Of course I do hope HTC will start placing larger batteries in their phones.


.
By StevoLincolnite on 1/4/2013 2:53:42 PM , Rating: 2
I'm still interested in knowing what HTC has planned with S3 graphics?
Surely they didn't shuffle it around the "Via" group for just the patents...




That's alright...
By One43637 on 1/4/2013 3:28:54 PM , Rating: 2
While the worst is probably over, you should tell your shareholders that you will still probably have a fraction of Samsung's Android marketshare.

This coming from a HTC G1, Sensation and One S owner.




Too bad, but I think they're wrong
By nafhan on 1/4/2013 3:33:01 PM , Rating: 2
I like HTC. I think they make very nice devices. However, I think things may actually get worse for them.

I say this mainly because we've got companies like Huawei and ZTE entering HTC's markets with devices that are similar, and they've got plenty of incentive to undercut HTC.

We'll probably have a much better idea of how things will shake out after CES.




Keyboards? Keyboards. Keyboards!
By Myrandex on 1/4/2013 4:57:07 PM , Rating: 2
HTC, you used to make the phones with the absolutely best in mobile physical keyboards. I've never seen or touched a phone with a superior keyboard to the HTC Touch Pro 2. There have been others that have been close, but none quite that good with the offset keys, error keys, ctrl & alt keys for shortcuts, and dedicated number row across the top.

Please release some sweet phones merging this superior keyboard capability to some nice hardware implementations. Plenty of polls have showed that end users still want keybaords in phones. Step up and deliver like you can. And do it across OSes and across carriers. The HTC 7 Pro was close on the Windows Phone side, but releasing it on Sprint only in the U.S. was a mistake as well as making the international version not compatible with U.S. 3G frequenqies was second mistake.

Jason




HTC EVO 4G LTE
By tviceman on 1/4/2013 9:48:03 PM , Rating: 2
My current EVO LTE is my first HTC phone, and I have to say I am quite happy with it. I like the feel of the phone more than the GS3, the screen size more than the iphone, and they just updated the OS to jellybean so the phone has worked out well for me. But none of this is to say I'm an HTC customer for life.




It's Sad
By Helbore on 1/6/2013 7:46:26 PM , Rating: 2
I find it sad to see the state HTC are in today. The first smartphone I ever bought was an HTC Blue Angel (rebranded as the iMate PDA2K).

They've been in the smartphone game far longer than most. Way longer than market leaders, Apple and Samsung. HTC made smartphones back when only those interested in technology wanted smartphones. They also pioneered Android, far more than any other company.

Now, they're just getting walked all over by bigger companies with bigger budgets. It's sad, because I strongly believe that many of these companies wouldn't even have their current smartphone business if it weren't for HTC.




Droid DNA
By sm6184 on 1/7/2013 11:28:59 AM , Rating: 2
Gotta say, got the Droid DNA at release...absolutely loving it and everyone I show it drools over it too. Glad I didn't go with the plasticy feeling GS3!




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