COMMENT: Why HTC Is Heading the Same Place As Nokia + Blackberry

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Today HTC launched a brand new smartphone which for days I have been unable to write about because I was asked to sign an official NDA that prevents me from writing about the new device.

This is despite the fact that HTC has leaked to any media Company that would listen information about their new smartphone, we even saw a version of their new N8 HTC One flogged off on eBay for sub $500 despite it being a collector’s item.

And as for features every one of the new phones capabilities have been exposed for the simple reason that HTC want’s them out there because they think this is good viral marketing. 

Despite the HTC One being a very good smartphone which several journalists have raved about the Company has failed to grow their share of the Smartphone market for the simple reason that Taiwanese brands like HTC lack marketing clout.
In Australia the Company has moved to cut costs by cutting back on their PR efforts and it shows. 

HTC management are marketing micro managers, everything has to be cheap and they hate spending on big budget launches as a result sales fell 27% in the last quarter and profits have slumped over 86%.

HTC’s total shipments dropped, despite a smartphone market that grew by over 40 percent, according to Strategy Analytics.

Also falling is HTC’s share price which has gone down almost 90 percent, shrinking its market capitalization to $4 billion from $33 billion. HTC’s biggest problem is its mightiest foe, Samsung, which last year spent $14 billion on advertising – about the same as the GDP of Iceland. 

HTC posted its first-ever operating loss in the third quarter of 2013, after which ABI Research, a consulting firm, said that once such handset companies become unprofitable, only 10 percent can be expected to survive the next two years.
The prognosis underscores how perilous the smartphone business has become. In just five years, companies like BlackBerry, Nokia and Motorola have gone from leaders to takeover bait or balance-sheet basket cases. Start-ups in China, India and Brazil are grabbing mid- and low-end sales, and the high-end market is increasingly dominated by Samsung and Apple one commentator wrote recently.

“If you’re not a Tier 1 smartphone maker, it’s difficult to be heard,” said Ken Hyers, a senior analyst at Strategy Analytics. “You don’t have the megaphone, which is the marketing spend.”

Typically, manufacturers like HTC tank because their products don’t stack up. But HTC’s downward spiral has distressed plenty of phone reviewers who think it makes the best devices on the market so it has to be poor management and even lousier marketing for the slump. 
Penny pinching does not work in the smartphone market and HTC is learning the hard way.  

The One, released in 2013, earned the “Smartphone of the Year” title at the Mobile World Congress, held in Barcelona in February, and was only the third phone to win a five-star review from TechRadar. A critic at the site said the phone “is closing in on flawless.”

When the Samsung Galaxy S3 was launched hundreds of journalists attended the launch and when they walked out of the Sydney theatre where the launch was held there were big billboards for the new device. That night the TV airways were awash with Samsung advertising and consumers were able to walk into a store and experience the new smartphone.

Sales went through the roof, but don’t expect this from HTC because Taiwanese management who despite hiring Robert Downey Jr to jack up their brand have failed to invest in Western marketing agencies to deliver knock out advertising. Today it’s irrelevant whether you have the best smartphone and HTC could well have one of the best with their new device.

The issue is whether consumers and their word of mouth see your brand as a lifestyle brand that will enhance their life. 

They do with an iPhone and a Galaxy smartphone but not a HTC phone because like the Blackberry the brand is failing to attract consumer attention. 

HTC’s idea of marketing is to give sellers a higher margin and hope like hell that that they can sell enough HTC devices to make an impression. 

In Australia HTC is even trying to do their PR on the cheap with Bite their regular PR Company nowhere to be seen at the recent NDA briefing,.

HTC Dropbox folders that were supposed to have images and assets for the M8 launch arrived empty at media Companies. The Company also blamed their ‘Production Team’ for production issues when press releases failed to arrive the day before the official launch.

When we finally got the Dropbox files open they contained three static images of the new M8 from different angles. There were no lifestyle shots and no images of the new features. 

If HTC believe this is the way to go they will quickly join Nokia and Blackberry on the smartphone slag heap.
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