All of HTC’s woes come at a time when Research In Motion Ltd (NASDAQ:BBRY) is releasing more handsets globally, and Microsoft Corporation (NASDAQ:MSFT)’s Windows Phone operating system is actually beginning to show some signs of life.
Maybe Android has become a problem rather than a solution for HTC.
Branching out and offering a line of Windows Phones would be a good start to get some diversification for HTC. They could put Windows Phone software on their existing hardware with few modifications, and should Windows Phone take off then HTC would be at the forefront of the Windows Phone success. Microsoft Corporation (NASDAQ:MSFT) would be thrilled if HTC doubled down on Windows Phone, as it would give customers a non-Nokia Corporation (ADR) (NYSE:NOK) choice for a Windows Phone. Several of the high-level departures from HTC have ended up at Microsoft Corporation (NASDAQ:MSFT) as well; they could now reach back to HTC with a Windows Phone lifeline.
HTC has launched Windows Phones before, but like most hardware makers other than Nokia Corporation (ADR) (NYSE:NOK), the company’s Windows Phone handsets have been a halfhearted afterthought. Doubling down on Windows Phone would give HTC employees something to stick around for, giving them another avenue to direct their resources instead of searching for a new job.
Hardware vs. software
Hardware makers always face slim margins. Think Dell Inc. (NASDAQ:DELL) and Hewlett-Packard Company (NYSE:HPQ) in the consumer PC market for examples. Software makers, on the other hand, have far higher margins; think Microsoft Corporation (NASDAQ:MSFT). The main exception to this is Apple, which makes both their own hardware and software and sells the package at high-end near-luxury prices. But Apple is the exception that makes the rule.
If there is any chance of a turnaround from HTC in the next two years, it is going to be done through at least two lines of unified smartphone lines running not only Android but Windows Phone.
The article Android’s Sinking Ship originally appeared on Fool.com is written by David Danna.
David Danna has no position in any stocks mentioned. The Motley Fool recommends Apple and Google. The Motley Fool owns shares of Apple, Google, and Microsoft. David is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.
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