Has HTC plateaued?


Taiwan based smartphone manufacturer HTC said that their November sales fell nearly 30% from a year ago. This came after they issued a statement a month ago that they won’t see any growth in their sales during the last quarter of the year.

While the company still performs very well in the market this year, the sales loss should cause an alarm in their ranks. This comes after they have suffered legal setbacks in their patency battle against Apple.

While HTC is being credited as a company that upgrades their technology quickly, adding new features and altering their designs, the company still feels the impact of the ever booming rival companies that offer Androids to their users. Still, HTC has managed to differentiate itself from its competition with its Sense interface, that enables HTC users to attract Android users to using their brand.

Their most vaunted rival is Samsung. With the latter release of the Galaxy S franchise, Samsung is now ranked higher than HTC in the Android market. When people talk about smartphones, the usual brands of choice would be Samsung or Apple.

According to Gartner analyst Hugues de la Vergne, “HTC can still remain strong in the smartphone space but that is going to be more difficult for them as they don’t have a strong of a brand or as big of a checkbook to fund key operator promotions as some of their competitors.”

Sales and volume have not been HTC’s problem. Though the blistering pace that they have enjoyed in growth over the years seems to be unlikely for now.

HTC has planted the seeds for the Android market over the years. Unfortunately for them, the ones reaping the rewards are their competitors in the market.

Samsung sluggishly started in adopting Android, and their first smartphone releases were weak to say the least. But as they improved on their product and a ton of marketing and carrier support the Galaxy S has established its franchise and is still growing its number of fan base.

HTC, though has a number of products clients can choose from, have difficulty in increasing product sales. This is due to the fact that their budget was spent on building the brand and not any specific product.

Another issue haunting HTC is in the litigation front. The U.S. International Trade Commission issued a ruling that says that HTC has violated a couple of Apple’s patents. The final judgment will be issued next week and if worse comes to worse, their phones can be banned from being imported in U.S. soil.

Carrier support is also a factor in HTC’s decline. While the latter teamed up with Verizon Wireless in holding an event in New York to promote Rezound, Verizon said that they prefer Motorola’s Droid RAZR as its flagship device. While other American carriers have either chosen Samsung Galaxy S II and Iphone 4S to be their chosen flagship phone.

It must be noted that a year ago, HTC enjoyed being the flagship phone of Verizon, Sprint and T-Mobile.

Some individuals have said that the decline in HTC’s popularity is due to the design of new products. If that is the case then the loss of Horace Luke, HTC’s Chief Innovation Officer in April could have been a big loss for the company.

Can HTC bounce back?

According to Garner analyst Ken Dulaney, “ I do think that HTC has more challenges than opportunities ahead”.