Cellcom
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Five years ago, HTC
acquired One & Co, a San Francisco industrial design agency, as it
began its drive to grow from mid-ranking smartphone maker to fully
fledged consumer brand.
It is a journey that almost succeeded, with Hollywood stars in its ads and a flagship device adored by gadget reviewers. But in a smartphone market dominated by Apple and Samsung, consumers are still treating HTC like a second-class citizen.
On a bright October afternoon, in a One & Co office filled with brightly coloured prototypes of handset casings and young designers with immaculately dishevelled hair, Peter Chou and Cher Wang, HTC’s chief executive and chairman respectively, explain a subtle but significant shift in power at the top of the Taiwanese company.
“We are diehard about design,” Mr Chou says.
In a rare joint interview after a bruising few months for the Taiwanese smartphone maker, the pair sit at opposite sides of a conference-room table and explain how Mr Chou will focus on products and “innovation”, while Ms Wang will handle the less glamorous parts of fixing the company that she co-founded: sales, marketing, logistics and customer service.
“It’s a very exciting time right now because there are so many challenges – it is keeping us on tiptoes for the vision,” Ms Wang says.
Mr Chou and Ms Wang seemed far more animated by ideas for new devices beyond simply smartphones, hinting that HTC has both a new tablet computer and a wearable device, which might compete with Samsung’s Galaxy Gear smart watch, in development.
Wearable technology is “a critical segment for us”, Mr Chou says. “It matches what we do today as a mobile experience overall. That is one area we are excited about.”
Mr Chou says that HTC worked on a smart watch with Microsoft several years ago, but is vague on when it might try again. “It’s still too early,” he says of the wearable-technology market, with many “version one”, “gimmick” experiences that lack style. “It has to meet a need, otherwise if it’s just a gimmick or concept, it’s not for people’s day-to-day lives. That is an opportunity for us,” he says. “People laughed at us when we came out with the first smartphone . . . Now everyone has a smartphone. I’m pretty sure wearables will be the same, but don’t judge from what is in the market [now].”
While Apple – which is also believed to be developing its own “iWatch” – is poised to reveal its latest range of iPads this week, HTC remains largely absent from the tablet market.
“When the [HTC] tablet comes out it will be something nice and disruptive,” Ms Wang says. “There are a lot of devices to innovate . . . Ubiquitous intelligence is not just wearables.”
For now, HTC has more immediate problems to tackle than the “smart world” Ms Wang aspires to build.
Mr Chou’s self-professed perfectionism when it comes to product details, such as the HTC One’s seamless aluminium casing and its unusual “Ultrapixel” camera, comes at a cost.
Production issues and difficulty sourcing sufficient components from suppliers delayed its flagship smartphone’s launch this spring by a few crucial weeks so that by the time it did go on sale, Samsung’s huge marketing campaign had swung into action to promote its rival, the Galaxy S4.
“Samsung do this blitzkrieg marketing,” says Ben Wood, mobile analyst with CCS Insight. “Poor little HTC lost their window of opportunity.”
While he describes Mr Chou as a “street fighter”, Mr Wood says that Ms Wang can “keep the guys chasing rainbows in check”.
Some analysts and current and former employees say the group could look to do more contract design work for companies such as Amazon, relying on their support for marketing and sales. It could also look to go more niche – not unseating Samsung, but instead succeeding on its own, more limited terms.
“Compare phones to autos. When Porsche has a great year the folks over at GM and Mercedes aren’t worried. There’s room for everybody,” said one person familiar with the group.
That is the view Mr Chou shares.
“The market is really big. HTC is a small company. For us to stay competitive and survive is not a huge problem,” says Mr Chou. HTC stands a “good chance” of winning a 15 per cent share in high-end smartphones and 5 per cent of the global market overall would be a “pretty good number for us”, he adds.
“People need to look at it that way, rather than [saying] we have to beat the other guy who has a 50 per cent market share.”
It is a journey that almost succeeded, with Hollywood stars in its ads and a flagship device adored by gadget reviewers. But in a smartphone market dominated by Apple and Samsung, consumers are still treating HTC like a second-class citizen.
On a bright October afternoon, in a One & Co office filled with brightly coloured prototypes of handset casings and young designers with immaculately dishevelled hair, Peter Chou and Cher Wang, HTC’s chief executive and chairman respectively, explain a subtle but significant shift in power at the top of the Taiwanese company.
“We are diehard about design,” Mr Chou says.
In a rare joint interview after a bruising few months for the Taiwanese smartphone maker, the pair sit at opposite sides of a conference-room table and explain how Mr Chou will focus on products and “innovation”, while Ms Wang will handle the less glamorous parts of fixing the company that she co-founded: sales, marketing, logistics and customer service.
“It’s a very exciting time right now because there are so many challenges – it is keeping us on tiptoes for the vision,” Ms Wang says.
Some analysts say that is putting it lightly. While its flagship HTC One has received favourable reviews, even Robert “Iron Man” Downey Jr TV commercials have been unable to stem the decline in HTC’s smartphone market share to what Gartner estimates at 2.6 per cent.
The record for companies operating in the
space between Apple and Samsung, and the morass of cheap handset makers
that are absorbing the Chinese market, does not bode well for HTC. Nokia was acquired on the cheap by Microsoft after its Lumia phones failed to win over consumers while a shrunken BlackBerry is also in talks with a variety of partners after its latest devices struggled to sell.
Mr Chou insists HTC’s problems are different because its flagship
device, the HTC One, is doing well. “The market share loss is mostly
coming from the mid- and entry-level segment,” he says. With his renewed
focus on products, he plans to revamp HTC’s midrange portfolio.
That may involve further partnerships with the likes of Google and Facebook. Mr Chou would not comment on the FT’s report last week that HTC is in talks with Amazon about producing a smartphone
for the e-commerce group, saying only: “We are open minded to those
kinds of opportunities always but we can’t specifically talk about any
particular one.”
In spite of its acquisition of Nokia, Microsoft is keen for HTC to
keep producing Windows Phone devices. But HTC's sales of Windows devices
have been “pretty small”, Mr Chou says. “First we have to figure out
how we do the business side, and how we position a Windows Phone product
in the market.”Mr Chou and Ms Wang seemed far more animated by ideas for new devices beyond simply smartphones, hinting that HTC has both a new tablet computer and a wearable device, which might compete with Samsung’s Galaxy Gear smart watch, in development.
Wearable technology is “a critical segment for us”, Mr Chou says. “It matches what we do today as a mobile experience overall. That is one area we are excited about.”
Mr Chou says that HTC worked on a smart watch with Microsoft several years ago, but is vague on when it might try again. “It’s still too early,” he says of the wearable-technology market, with many “version one”, “gimmick” experiences that lack style. “It has to meet a need, otherwise if it’s just a gimmick or concept, it’s not for people’s day-to-day lives. That is an opportunity for us,” he says. “People laughed at us when we came out with the first smartphone . . . Now everyone has a smartphone. I’m pretty sure wearables will be the same, but don’t judge from what is in the market [now].”
While Apple – which is also believed to be developing its own “iWatch” – is poised to reveal its latest range of iPads this week, HTC remains largely absent from the tablet market.
“When the [HTC] tablet comes out it will be something nice and disruptive,” Ms Wang says. “There are a lot of devices to innovate . . . Ubiquitous intelligence is not just wearables.”
For now, HTC has more immediate problems to tackle than the “smart world” Ms Wang aspires to build.
Mr Chou’s self-professed perfectionism when it comes to product details, such as the HTC One’s seamless aluminium casing and its unusual “Ultrapixel” camera, comes at a cost.
Production issues and difficulty sourcing sufficient components from suppliers delayed its flagship smartphone’s launch this spring by a few crucial weeks so that by the time it did go on sale, Samsung’s huge marketing campaign had swung into action to promote its rival, the Galaxy S4.
“Samsung do this blitzkrieg marketing,” says Ben Wood, mobile analyst with CCS Insight. “Poor little HTC lost their window of opportunity.”
While he describes Mr Chou as a “street fighter”, Mr Wood says that Ms Wang can “keep the guys chasing rainbows in check”.
Some analysts and current and former employees say the group could look to do more contract design work for companies such as Amazon, relying on their support for marketing and sales. It could also look to go more niche – not unseating Samsung, but instead succeeding on its own, more limited terms.
“Compare phones to autos. When Porsche has a great year the folks over at GM and Mercedes aren’t worried. There’s room for everybody,” said one person familiar with the group.
That is the view Mr Chou shares.
“The market is really big. HTC is a small company. For us to stay competitive and survive is not a huge problem,” says Mr Chou. HTC stands a “good chance” of winning a 15 per cent share in high-end smartphones and 5 per cent of the global market overall would be a “pretty good number for us”, he adds.
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