HTC has had a rough couple of years. Once one of the top smartphone manufacturers in the industry, the company’s market value has plummeted seventy-five percent in just five years, mostly due to an intense decline in mobile handset market share. And while other companies like Samsung are seeing massive success in the smartphone market, HTC has plummeted to just below two percent in total Android market share, according to a recent report.
The company decided to spin off Vive into a subsidiary company back in June of last year, since it’s VR headset has become one of its most successful assets of the last decade. And while that business is still doing quite well, HTC as a whole is still struggling. The last couple of years have been filled with what could be described as a complete and utter failure to market to the right consumers.
A full sale of the company is less likely because there's no obvious choice for a single acquirer
So, what should HTC do about it? According to a recent report from Bloomberg, the company is “exploring options” that could range from selling off its Vive business to a full sale of the company. HTC is working with an adviser and is considering bringing in a strategic investor, according to people familiar with the situation.
Let’s not get too far ahead of ourselves though. The report states that a full sale of the company is less likely because there’s no obvious choice for a single acquirer.
As previously mentioned, much of HTC’s hardship could likely be reduced to brand recognition for customers. When the average consumer sees an Android phone, they’ll often respond by asking if it’s “The new Galaxy“. Samsung has all but completely taken over the Android space, to a point where customers don’t know or care about the differences between devices. As a Reddit commenter once mentioned in one of my previous posts, the average consumer isn’t going to care if HTC updated its Sense UI, or if the new U11 has a squeezable frame. The ability to make their brand visible to the average consumer is where HTC has lost the most in this race, and unless they are able to get devices into carrier stores and on the faces of billboards, that’s not likely to change anytime soon.
The company does have something else going for it, though. HTC is the manufacturer of the Google Pixel, meaning they are making direct profit from Google every time a batch is made. This likely isn’t the place HTC would like to be making most of their profits, but it is a safe and easy way to help keep the company afloat. And with rumors of the company developing at least one of Google’s next generation Pixel devices, it seems HTC should have at least a bit of steady income for now.
Read and watch: HTC Vive review
Google acquiring a company that excels in hardware would be a boon for the search giant's future hardware initiatives.
If HTC did decide to sell its smartphone business, Google could be a great option. Just as Apple uses Foxconn to manufacture most of its devices, having a solely owned manufacturing business could be a great thing for the search giant. While manufacturing both the hardware and software of a service can be bad for variety and competition in a business, there is something special that can occur when there is one captain in control of the ship. Ever wonder why people use the phrase “iPhones just work”? It’s because Apple can optimize their OS for one specific piece of hardware, something that Android phones have a bit more trouble with. Of course, Google has been outsourcing the manufacturing duties to other companies for its Nexus and Pixel phones, but acquiring a company that excels in hardware would be a boon for Google’s future hardware initiatives.
Whatever happens with HTC’s businesses, it’s clear that they have begun considering their options.
What do you think the next best step is for HTC? Should they make one last attempt to break back in to the consumer market? Though the HTC U11 has been greeted with quite a number of positive reviews, availability and visibility has stunted it’s success to a pretty severe level.