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HTC: The Stealth Warrior

Do you know {complink 2387|High Tech Computer Corp. (HTC)}? The name may not ring a bell for many consumers, but chances are that someone in your office or even in your family is making or receiving a phone call on a device from the Taiwanese company right now. HTC is also one of the prime reasons why many components suppliers, including Intel, Qualcomm, and Texas Instruments, see a future for themselves in the sector even without scoring a design win at Apple.

You'll be hearing more about HTC in coming years and should keep the company on your radar. Rather quietly, it has penetrated one of the most competitive segments of the consumer electronics industry over the last five years, steadily building up market share in smartphones, first via partnerships with telecommunication services providers and then with its own branded offerings.

The industry can learn some lessons from the rapid growth of HTC, but the company also may want to review the history of some competitors to know the pitfalls that lie ahead.

HTC grew initially by serving as an ODM making branded products for telecom companies. The telcos could get a higher margin on such products, and HTC used its years as an ODM (1997 to 2006) to burnish its own reputation as a reliable partner and vastly improve its design skills. The partnerships with telcos like Verizon, T-Mobile, Sprint, Orange, and NTT DoCoMo allowed HTC to tap their knowledge base for design concepts, share R&D costs, and avoid the huge startup and marketing costs associated with entry into such a highly sensitive market.

Such partnerships aren't common with the larger vendors. Companies like Apple, Motorola, and Nokia typically carry development costs alone and simply share product roadmaps with telecom companies rather than jointly develop such offerings. Apple doesn't even discuss details of its product roadmaps with telecom carriers. The company makes a point of not soliciting customer input, and the enormous success of its iPhone has further reinforced the belief it doesn't need third-party contributions.

That strategy works for Apple, and it may be a model for other companies, too — as long as they keep on winning customer devotion. HTC, in the meantime, is straddling the line by pumping out products based on telco feedback, its own internal design teams, and customer input. After launching its own branded products in 2006, the company has flooded the smartphone market with a wide range of appealing products. In fact, the names for its offerings demonstrate a willingness to be daring while hewing closely to offerings from rivals.

The HTC Sensation 4G, for instance, is a widely sought-after product, and so is the HTC Thunderbolt. Both these and other HTC products (Amaze, myTouch, Wildfire, and the Droid Incredible) have allowed HTC to quietly establish a presence in the tough market without drawing too much negative attention from its heavyweight rivals. But such attention is inevitable and has arrived, with Apple and Samsung especially beginning to see HTC as a stealth rival that must be quickly repelled.

This is why what HTC does next is being closely monitored. {complink 9171|Frost & Sullivan} analyst Saverio Romeo best summed up the challenge facing the company in an email:

    Three years ago I asked HTC: 'Where is your brand?' They answered: 'It will come'. At the recent HTC party at The Roundhouse in London, I could see the answer to that question. Today, HTC represents a specific mobile style, mobile lifestyle as Peter Chou, the CEO, highlighted during the press conference at The Roundhouse launching the HTC Sensation XE. That mobile lifestyle is built around delivering a mobile experience made of design and technological innovation.

    I have the answer to my question. Without doubts, HTC is one of the protagonists in the world of mobile devices. My next question to them will then be: 'Which is the future direction of an established smartphone brand like HTC?' If HTC wants to be a mobile lifestyle provider, and I know the term provider is not very stylish, probably, devices are not enough.

What will HTC come up with tomorrow, and which markets will it next invade? The OEMs in consumer and adjacent electronics markets are now aware of the stealth warrior from Taiwan. So, the next moves will come, not only from HTC, but also from the rivals that didn't at first see its fast approach. The surprise is over; let the real war begin.

18 comments on “HTC: The Stealth Warrior

  1. AnalyzeThis
    October 14, 2011

    I'm certainly aware of HTC, although I can't quite wrap my head around their marketing strategy.

    A good number of HTC's phones are popular, but you rarely hear them actually referred to as “HTC” products. I think a good number of people know what the ThunderBolt is (a 4G phone at Verizon), but if you asked them what company makes the ThunderBolt, I think most people would have to guess. Although maybe that's just me.

    It seems to me that Samsung does a better job of associating their products with their brand. And Apple obviously does the best job.

    Anyhow, HTC is certainly a big (and perhaps often overlooked) player in the space. I think they have a fairly good reputation as well, although I will say that the one HTC stereotype I've heard of is that their phones can tend to lean towards being flimsy and perhaps the build quality isn't quite the best, in the long-term.

    Anyhow, I do think HTC will continue to do what they do: kind of quietly releasing new products that actually find an audience. They're doing a lot of things on the consumer side of the market that companies like RIM could only dream of doing at this point.

  2. Wale Bakare
    October 14, 2011

    Thanks alot Bolaji for the piece.  I so much like the style choosen by the company in breaking into the world market, gradually and stylishly ramping on its share portion in smartphone market.

    In opinion, the more competitors in the smart device business the better for suppliers and distributors. Constrastingly, more headache for the likes of already & well established big guns –  Apple, Nokia, Samsung, SonyEricsson and Google(Motorola) and RIM.

    But such attention is inevitable and has arrived, with Apple and Samsung especially beginning to see HTC as a stealth rival that must be quickly repelled.

    Not only HTC, i think. Shouldn't they all be on the market watchfull, may be another rival from China –  ZTE?

  3. elctrnx_lyf
    October 14, 2011

    htc has silently grown to a potential handset maker in the last 5 years. Their investments are also very strategicial with the acqusition of grpahic chip company. They will be a leading mobile maker in the future along with apple, nokia, samsung in the future.

  4. DataCrunch
    October 14, 2011

    It’s good to see HTC coming out of the shadows, although many in the mobile space have known about HTC for some time and especially in the last few years.  They have been producing some very innovative, feature-rich devices.  Something to keep an eye out is that HTC is now producing tablets as well.

  5. Clairvoyant
    October 15, 2011

    Agreed. I also see HTC becoming a major manufacturer of mobile products. While a lot of the news lately has been about other manufacturers, HTC silently is becoming larger in the marketplace.

  6. prabhakar_deosthali
    October 15, 2011

    IN the last 6 months or so HTC brand has made a strong appearance on the Mobile scene in India. It is being aggresively priced and well promoted in TV and newspaper ads. Until today I did not care much about this brand thinking it must be one of those low cost chinese product. But knowing that it is a Taiwanese brand I would definitely recomend buying its products.

     

  7. DataCrunch
    October 15, 2011

    HTC has definitely picked up steam internationally, but especially in the US. Here is an interesting chart as of May 2011 for a 3 month period of sales:

     Apple Is No. 1 Smartphone Manufacturer In US, Despite Having Just Two Handsets In Market

  8. _hm
    October 15, 2011

    How does HTC position itself in US and Europe with respect to patents war? Will they be able to progress further without portfolio of patents and innovations?

     

  9. DataCrunch
    October 16, 2011

    @_hm: HTC just acquired a number of patents…thanks to Google to bolster its lawsuit against Apple.  I think you will find this recent article of interest:

    HTC Sues Apple Using Google Patents Bought Last Week as Battle Escalates

  10. Wale Bakare
    October 16, 2011

    Thanks Dave. Based on the chart, HTC's US smartphone market share ahead of Nokia – sometimes regarded as a powerful smartphone brand. Infact, that speaks volume about HTC in world market.

  11. DataCrunch
    October 16, 2011

    Hi Wale, while Nokia has been a leader worldwide for its mobile phones, it really never gained a strong footing in the US market.  Perhaps the Win-Nok deal will help re-energize Nokia, but it will be a struggle to catch up to Android and iOS devices.  Nokia did make some nice devices and it would be good to see some more innovative mobile devices come out soon.

  12. Wale Bakare
    October 16, 2011

    Nokia did make some nice devices and it would be good to see some more innovative mobile devices come out soon.

    Nokia's pedigree in market of smartphone still fresh in minds of consumers despite market share being strongholding by Apple ( iPhone) and Android (HTC & Samsung), as well RIM.  Will the integration of Multitasking and Internet Explorer 9 to Windows phone enough to claw back losing Nokia's market portion?

  13. SunitaT
    October 17, 2011

    Will the integration of Multitasking and Internet Explorer 9 to Windows phone enough to claw back losing Nokia's market potion?

    @Wale Bakare, I am bit optimistic about Windows-Nokia mobile phone. Reason being Nokia provides  best hardware features for its mobiles. Moreover people are very familiar wih window operating system which works in favour of this mobile.

  14. SunitaT
    October 17, 2011

    HTC's US smartphone market share ahead of Nokia – sometimes regarded as a powerful smartphone brand.

    @Wale, I feel HTC did a smart move adopting Android OS. I think this choice of OS made a lot of difference between Nokia and HTC. Unfortunately for Nokia Symbian couldnt compete with Android. I think Android apps played vital role in androids popularity.

  15. Anna Young
    October 18, 2011

     ” although I will say that the one HTC stereotype I've heard of is that their phones can tend to lean towards being flimsy and perhaps the build quality isn't quite the best, in the long-term”

    @DennisQ I share your view. In addition, HTC's position in the US smartphone OEM share chart, shown by Dave on EBN shows that HTC is quietly and smartly I would say gaining ground. However your comments as quoted above is certainly correct. I believe the quality and longevity is a challenge and will come with improvement. That is something for HTC to work on if they are to survive the smartphone's war.

  16. Ashu001
    October 20, 2011

    Dsve, I have a lot of expectation from the Windows-Nokia alliance as well. Really looking forward to the kind of competition they will give Apple and Android. But I sure as hell love the HTC. They make really-really beautiful phones. And the form-factor is amazing too.. Regards Ashish.

  17. JADEN
    October 26, 2011

    HTC is a company to watch for good because they have been maintaining steady growth and the future look bright for them in the smartphone's world.

  18. Anne
    October 26, 2011

    I anticipate that HTC are well positioned to take their growth story forward, and they need to make their products distribution effective, having much better reach in distribution and sales networks.

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