Not only is HTC Corp (TPE:2498)’s stock losing value but also market share. HTC Corp (TPE:2498)’s smartphones captured a quarter of the US smartphone market for a brief time in 2011, putting the devices slightly ahead of Apple Inc. (NASDAQ:AAPL)’s iPhone. This victory was short lived, however, as Apple released the iPhone 4S and Samsung Electronics Co., Ltd. (KRX:005930) began capturing Android users with its “Galaxy” line of smartphones.
Bad news on all fronts
HTC Corp (TPE:2498) now accounts for less than 5% of smartphone sales, and in its latest reporting made a profit of just $3 million. The latest debacle for the company was the HTC Corp (TPE:2498) First, an Android smartphone that came pre-installed with Facebook Inc (NASDAQ:FB)’s “Home” interface. The First was discounted to just $0.99 on contract within a few weeks. The likelihood of many other carriers picking up the phone is negligible.
HTC Corp (TPE:2498) has been described as being “in free fall,” and former employees have taken to Twitter to tell their former coworkers to just give up and quit.
The company has been trying to launch a unified line of smartphones across all carriers for years. Up to this point, however, it has not had as much success as Samsung, Apple Inc. (NASDAQ:AAPL) or Nokia Corporation (ADR) (NYSE:NOK), whose offerings are uniform regardless of carrier.
HTC has now pinned its hopes of a recovery on the HTC One, which although delayed has just launched to rave reviews.
Alongside the launch of the One, however, there have been some high-profile departures from HTC. The CEO of the company’s Asia division has just left, as has the chief product officer, a VP of communications, the digital marketing director and the company’s product strategy manager.
With competition heating up, the last thing that HTC needs is a brain drain at the top of the company.
Branding and unification
Of course HTC not only has to compete with other Android makers but the original ruler of the smartphone realm, Apple Inc. (NASDAQ:AAPL). For years Apple was the king of branding and unification, as the iPhone is identical on all carriers worldwide. Now Apple Inc. (NASDAQ:AAPL) not only has to deal with Google Inc (NASDAQ:GOOG) pushing Android, but with Samsung Electronics Co., Ltd. (KRX:005930) and LG pushing branded and somewhat differentiated Android devices. Apple Inc. (NASDAQ:AAPL) makes their money not only from hardware but services such as iTunes and the Apple App Store, which combine to create an Apple Inc. (NASDAQ:AAPL) ecosystem. The company used to be alone in offering a complete ecosystem, but they are now not the only player with such an offering as now both Google Inc (NASDAQ:GOOG) and Microsoft Corporation (NASDAQ:MSFT) have full sets of similar services. We could possibly even see Samsung Electronics Co., Ltd. (KRX:005930) launch some of its own services to go along with their unified and differentiated hardware line.
This branding and unified device line caught HTC by surprise. HTC had been used to releasing phones on specific carriers with the carriers’ branding and specifications. Examples include the Droid phones on Verizon, the EVO phones on Sprint and the aforementioned HTC First. These partnerships and others like the one HTC has with Beats Audio are just one examples of HTC wasting time and effort on gimmicks while their competitors including Apple and Samsung Electronics Co., Ltd. (KRX:005930) strengthen their platforms.