HTC is a remarkable company. The other week, the Taiwanese firm celebrated its 20th birthday. Over the past two decades, HTC has changed radically. Most recently, we observed that HTC cannot offer viable competition to the Big Two in the smartphone industry. And to be honest, I myself had often wondered when HTC will either be taken over or disappear from the market altogether...
But I changed my mind. I believe that HTC can find a solid niche in the next two to three years, and could once again reshape itself and the market with its innovations. Perhaps you, dear reader, will be as surprised as I was following my visit to the Taiwan office.
One thing at a time.
From contract manufacturer to independent brand
If you had a HTC phone in the late 90s or 00s, then you probably didn't realize it. As a business model they operated as a so-called OEM - original equipment manufacturer. The company developed and produced telephones, or PDAs, without retailing them itself. For our younger readers: PDAs are personal digital assistants, which compared to the devices of today, were used awkwardly to edit mail and meetings.
HTC has always had a good nose for trends. The early focus on Windows Mobile as a mobile OS was an example of this. Most notably, Telcos themselves took the devices under their own flag. This worked so well that HTC produced well over 50 percent of all devices sold worldwide with Windows CE and PocketPC 2000.
HTC and Android - good friends from the beginning
This trend-spotting was also shown when HTC was supposed to develop a phone for a new OS. In 2008, T-Mobile presented the first Android smartphone - the HTC Dream, aka G1.
We cannot say that the G1 sold like hot cakes. It definitely wasn't the highest-quality phone. The slider was wobbly, and the software was then still miles behind the iPhone. But HTC backed a good horse, and doing so raised the stakes. Some other phones came out relatively quickly thereafter, which I'm happier to reminisce on: the HTC Magic, the HTC Hero or the HTC Desire.
Even if HTC hasn't departed entirely from its old OEM model, in the Taiwan HQ it is recognized that the firm's own brand should be strengthened. After all, this was probably the thought which brought successful innovations onto the market year after year. But back then, nobody knew the company behind these. Loud and aggressive marketing was still not the domain of HTC.
And so at some point in 2011, the firm added the slogan 'quietly brilliant' to the brand name. This was to somewhat extravert the Asian modesty of the firm, and possibly also to apologize for the lack of marketing.
HTC and tech fans: how friendship led to misunderstanding
The real story only begins now. But our introduction is particularly important for those who may not have followed the development of HTC. It's important to be able to contextualize what then followed.
The Taiwanese company had an outstanding starting position - enormous knowledge in the development and manufacturer of (smart)phones, an earlier market entry with Android smartphones and a close relationship with the early adopters of Android.
Within a short space of time, this advantage felt lost once again. And indeed in the moment where the company wanted to reach the stars and thus let their most loyal, initial fans out of sight. When they dreamed of catching up with Apple and simultaneously feared losing the connection to the big rivals from South Korea.
Tech and lifestyle - a bold but necessary experiment
At the end, the battle was lost on almost all fronts, although I'm not sure if they would formulate that sentence quite the same way in the HTC headquarters. But I asked Greig Williams, HTC's Europe manager what kind of audience he imagines for the future. He replied the following:
We want the technically minded people. We want to go back to our roots.
There's a lot of content in these two sentences. On one side, he wants to speak to those for whom innovations and technical gadgets are more important than beautiful designs or expensive brands. But on the other hand he also admits to once having this group and losing them.
I think that HTC lost many of its true fans when it tried to be cool. It was as if Sheldon Cooper would suddenly try to be Jack Bauer. Nothing against Jack Bauer - but it's another target group entirely.
The basic principle which HTC likely had wasn't wrong: at some point you need to depart the tech-freak niche to join the big boys up front. This a choice that Android also made. This doesn't mean that the heart and soul need to be left behind, otherwise you'll lose both your true fans as well as those you wanted to convert.
Has HTC learned from its mistakes?
Now they want to push toward their tech-savvy users and rely on innovations in product development. With the HTC U11 the Taiwanese firm presented several technical evolutions. For example, a significantly improved camera, boasting among other things a particularly powerful image stabilizer. Or a better sound experience which adapts to the individualized shape of the inner ear, although I still haven't been able to test this thoroughly.
With HTC Edge Sense, the company finally presented a real innovation. It allowed commands to be performed by compressing the edge of the smartphone. What first sounds like a quick gimmick is actually very practical when using the phone for a long time, such as during photography. Instead of needing to press the camera button on the display or chassis, the camera can be shot very easily by pressing the edge.
During my conversation with Chia-Lin Chang, President of HTC, I received yet another insight into future innovations. They are currently preparing for the introduction of 5G, planned from the year 2020. Chia-Lin Chang is sure that at this point, the technological world will face a new and fundamental upheaval, and that the deck will be reshuffled as to who commands marketshare. In five years, the HTC boss says, there will no longer be smartphones as we know them. We'll have a new device class entirely.
And it sounds as if they're already diligently working on this in Taiwan.
HTC - hurtling into the future, and not just thanks to Vive
If you'd have asked me two months ago whether HTC could survive long in the shark tank, I'd have probably answered 'no'. Following my travels I see this differently. As journalists, we were able to catch a glance into HTC's factories and design departments, and we also had elaborate quality assurances shown to us. This is all well and good, but I'm also sure that Lenovo, Samsung and others all have similar projects in the works.
However, what personally fascinated me was the openness, commitment and the spirit from HTC's employees and above all the management. "We want to do it," was the unspoken mission statement, "and we want to be seen as an innovator again". Not only will one of the best VR glasses (HTC Vive) be installed in the program, but the company will also invest heavily into research and development. Of the roughly 2,000 people working in HTC's manufacturing facilities, around 80% work in research and development.
But this won't be a walk in the park, especially considering the deep pockets of those sharing the market with HTC. But the atmosphere on the ground will encourage the Taiwanese company to return to the fray with the heart and mind to climb to their original position: near the top.