A war on two fronts: can HTC’s SA comeback model help fix its global problems?

Things haven’t been easy for HTC over the past few years. Actually that’s an understatement. Things have been more or less catastrophic for the Taiwanese company that helped introduce the world to Android.

In 2009, HTC was in a pretty good place. It sat just below Apple and above Samsung in terms of global marketshare, with all three looking solidly poised to challenge the dominance of Nokia and BlackBerry, the then kings of the emerging smartphone space.

Five years later, it accounts for less than two percent of global smartphone sales and has been usurped by a number of Chinese manufacturers swooping up the lower end of the market. A plummeting stock price, massive staff departures and a lack of any clear direction in its marketing strategy are just some of the issues that have plagued it in the past couple of years.

Things have hardly been better from a regional and local perspective. In South Africa, for instance, there were widespread reports of phones sitting in warehouses, while people were clamouring for them at their local phone dealerships. At one stage, the brand seemed to disappear from the country all together.

Yet despite all this, despite people asking whether it should just close up shop and return all its shareholders’ money, it kept building astonishingly good smartphones.

Back from the grave

And now, just as many South Africans were starting to wonder if they’d ever see another new HTC, the company’s made a return to the country, with the flagship One M8 already in stores (albeit a good couple of months after it launched in the rest of the world).

At a media briefing announcing the launch, the company said it had largely resolved its global staffing issues, had consulted widely with its South African dealers and that its aim is to use a sensible, measured approach to claim around five percent of the South African smartphone market.

At the moment, there are around 20-million smartphone users in the country, meaning that HTC would have to sell around a million phones in order to achieve its stated goal. That’s achievable right?

Not impossible, not easy

Well yes, it is within the realms of possibility, but it’s not going to be a walk in the park either. Bear in mind that the HTC One, which topped plenty “phone of the year lists, sold 6.4-million units and you start to get a sense of just how much work the Taiwanese manufacturer has ahead of it.

Even if it manages to sort out all its own issues, you have to bear in mind that it’s fighting a war on two very difficult fronts.

At the top-end of the market, it’s going up against Samsung and Apple — both of which see flagship sales that dwarf those of of the One — and at the bottom, it finds itself facing a group of Chinese players like Huawei, Hisense and ZTE that are building budget to mid-range phones that can compete spec-wise with pretty much everything put out by the more traditional players.

In South Africa, its plan is to attack the former front first with the One M8 already launched and the One M8 Mini set to follow later this year.

The tactic, it explains, is to rebuild itself as an aspirational brand before tackling the lower end of the market. It’s essentially the same model that Samsung follows, although with a lot fewer models.

One thing in its favour is that its devices tend to have a lot less bloatware than those produced by Samsung (and a lot of other Android manufacturers), although you do tend to have to explain why that matters to non-geeks. Its phones also tend to feel a lot more well-built because, well, they are.

It’s pretty easy to see that, like many of those challenges, HTC’s advantages apply as much to South Africa as the rest of the world, but there’s one factor that could potentially be more important than any of the others.

Tick, tock

If the past few years have taught us anything about the smartphone space, it’s that timing is everything. While Apple and Samsung seized on the lethargy of Nokia and Blackberry, HTC seemed to freeze. It missed its chance at building on the groundswell it had built in the early days of smartphones and, once it realised what was happening, it was in danger of collapsing in on itself.

Thing is, it hasn’t. It’s barely clinging on, but it’s clinging on nonetheless and sometimes thriving in the tech space is just about hanging in long enough.

What makes me say that? Well, in order to answer that question, I’d like you to cast your minds back a few years (to around the same time HTC was founded actually). In that distant past, there was another very high profile tech company that seemed on the verge of implosion. Like HTC, people were convinced the board should shut up shop and give the shareholders their money back.

Then something remarkable happened. It brought the CEO it fired nearly a decade before back into the fold and started making the kind of products that people adore and wax lyrical over. It hasn’t looked back since.

Thing is, HTC doesn’t have a Steve Jobs-type figure in its company history (not many companies do), but it’s already got products so beautiful they blur the line between design and art, it’s got a pretty solid relationship with Google and it has a group of core devotees (believe me I’ve met some of them) ready to evangelise as soon as they get the chance.

It doesn’t, in short, have to invent new product categories. Apple sure as heck didn’t. All it has to do it is hold on for a little while and strike when the moment is right.

Five percent of any one market is fine for now but, if it gets things right and lets the products speak for themselves, this is a company capable of so much more.