HTC, based in Taiwan, is supposed to be the leader among the world’s Android-based smartphone companies. It is supposed to be the company with products that can challenge Apple’s (NASDAQ: AAPL) iPhone franchise. Those assumptions were true until last month. Now, HTC’s prospects have fallen apart, and it is hard to find an explanation. Perhaps new smartphones from other companies have overwhelmed its best products.
HTC has announced November results. Though the company’s shipments have grown for years, revenue fell last month to $1.03 billion, down 19.6% from November a year ago.
The HTC figures show how fickle smartphone consumers can be. Samsung has released a fleet of new handsets, many powered by Android. The South Korean company is one of the largest corporations in the world. It can afford a nearly endless investment in R&D and marketing. Other, smaller companies like Motorola Mobility (NYSE: MMI), which is about to be taken over by Google (NASDAQ: GOOG), have recently launched new products of their own. Motorola’s new release is an update of its iconic RAZR model, freshened with a new Android OS.
HTC’s difficulties also demonstrate the extent to which Apple rules the smartphone industry, even with the rise of Android. The introduction of the iPhone 4S undoubtedly has hurt the sales of most other smartphone companies. The unprecedented demand for the product, which likely will rise throughout the holidays, will make a comeback by HTC all the more difficult.
HTC, until so recently the company to beat in the smartphone industry, has been quickly harmed by a slew of competitors, each anxious to take away some of the Taiwan company’s extraordinary success. At this point, the efforts of its rivals have worked.
Douglas A. McIntyre