Okay Geek Farm
Could HTC's rise to smartphone-fandom be slowly ending?
Daniel Carey
Since the Android boom began, one smartphone manufacturer has led the pack, surpassing other OEMs with superbly manufactured wares and a highly robust custom user-interface. Taiwanese company HTC has seen nothing but rising profit margins and sales since adopting Google’s mobile operating system three years ago. Yet despite this profound success, the company has expressed that it expects little in the way of record breaking sales headed into the final quarter of 2011. The average selling price of current HTC smartphones is on a steadily declining slope, but why?
In a recent article posted on GigaOM, Kevin C. Tofel has analysed such the question posted above - making reference to both the over-saturation throughout camp Android, and the slowly increasing pressure applied by Nokia as they (finally) enter the Windows Phone space.
(Now before continuing, I will preface this by stating Kevin’s article is a definite must read for those remotely interested in HTC’s future).
HTC 3rd Quarter Sales / Financial Review
- Revenue was up 79 percent year-over-year for a total NT of $135.8B.
- Net income was up 68 percent year-over year (or 7 percent quarter-over-quarter) for a total NT of $18.68B.
- Handset shipment grew substantially year-over-year, up by 93 percent for a total of 13.2 million units shipped. Interestingly (yet unsurprisingly), handset shipment for all of 2011 is up 125 percent year-over-year; no doubt thanks to mass consumer adoption of Google’s Android platform throughout 2011.
As I’ve previously stated, HTC has seen profound growth and prosperity under Android’s wing, however, as the company continues to churn out devices, it is in effect cannibalising previous handsets. In his article Kevin notes, that unlike Apple with its iPhone or Samsung with its Galaxy S II, HTC is yet to create a “blockbuster hit that has people buzzing.” In essence I agree with this statement. In today’s consumer electronics market, consumers no longer simply align themselves with a brand, but instead, a single device lineage.
Really think about that last statement. As a species we tend to stick with what we know, it has served most of the populace well for thousands of years. Sure success on an international financial scale is measured by wealth and sales figures, yet on a more personal level, one can potentially argue success and longevity fall hand in hand. Much like farmers who choose to breed from the same family of bovine or swine, technology companies are beginning to do the same. Why? Because it works! In the technology market today, longevity sells. Maybe not individual device longevity, because as consumers we want better and faster technology, yet as I’ve noted, I’m speaking of the longevity of a bloodline - after all, what is the point of having something without pedigree?
Carrying on from that theme it is relatively easy to see why most in today’s consumer electronics market choose a proverbial lineage of device to cling to. If not so, why would Apple have seen continued success with its iPhone line - which might I add, recently sold 4 million iPhone 4S units in its first weekend of availability. And the ‘device lineage’ ideology doesn’t simply apply to those in Cupertino, as we have seen in recent months, Samsung has been able to ship millions of Galaxy S II’s since its inaugural launch.
HTC might still be king, but everyday we are seeing more and more Android OEMs pop-up. As aforesaid, Samsung has slowly been working its way up the metaphoric Android weight class, yet HTC is also facing other successful competitors in the likes of LG, Sony Ericsson and Motorola. Once again summing up Kevin’s ideas; whilst early adoption of Google’s mobile operating system proved highly lucrative for those in Taiwan, “there are more players in the game now” and whilst the game never changes, the players certainly can.
