Discussion: A future for HTC?

HTC is in a tough spot. Despite releasing some amazing phones lately (I currently use a HTC One S and it is a wonderful piece of technology), sales are going down. And unlike other Android device makers like Samsung, Sony and LG, HTC have smartphones as their main product. It cannot rely on profits from other parts of the company to survive, it must constantly make phones that people want to buy. And unlike Apple, HTC doesn't make much money of a phone after people buy it. Because of this, they are constantly releasing new phones. And that's not always a good thing.

I've read countless forum posts about how people feel "cheated" when they buy a flagship HTC device (or any Android phone, for that matter) and in only a few months, a new phone is released that's a lot better. I've seen the phrase "I'll never buy a HTC/Android phone again!" several times. It's a strange argument; just because there's a better phone out there doesn't make your own phone any worse. It does, however, two bad things to you:

1. It removes the feeling of having the best phone out there. This is pretty childish but common enough among users that companies like HTC should take notice. The only solution to this is to release fewer phones, and that's not always possible. However, this is usually not nearly as important as...

2. It makes the company (in this case HTC) care less about your phone. In practise, this means that you are less likely to recieve software updates, and when you do, it will take longer to get them.

If you don't know all that much about the Android ecosystem, the second point may not seem like that big of a deal. But it is. Google is an interesting company. The pace in which they release new Android versions is quite insane, and every new version contains serious improvements that users are likely to notice. Performance improvements are really important because Android is still quite poorly optimized in comparison to iOS and WP, and the interface changes that Google make are almost always for the better. But no phones other than the Nexus phones (that get their software directly from Google) are even close to keeping up with this pace. It's very common for a new version of Android to come out quite long before your phone gets the last one. A situation like this wouldn't be accepted in any other ecosystem, but when it comes to Android, it has actually been an important part of its success.

The delay between Google's new versions of Android and the phones' updates are mostly due to the fact that the device makers have their own skins that run on top of Android and change the interface, fix problems and generally try to improve the experience as much as possible. In the early days of Android, this was a good thing. What Google threw out into this world were quite obviously rushed and half-finished buggy messes. It was up to the device makers, with HTC taking the lead from the very beginning, to improve and refine the OS and make it something that's actually usable for end users.

Now, the pure versions of Android are so good that they can stand proud on their own. Google is now the one bringing the new features, and the device makers struggle to adapt their interfaces to allow the end users to see what Google's done. The custom skins are just in the way. They slow down the updating process, as well as introducing meaningless visual design inconsistencies to a perfectly usable OS.

No company wants to kill their darlings, to throw away something that they've been working on for years. But it's a move that makes sense. Any company that does this will get an instant advantage over its competitors. Basically instant software updates will mean that their phones will always lie basically a whole version of Android ahead of all competitors, except from the Nexus phones. And it doesn't prevent the company to innovate. They can still do cool things with hardware. They can also include specific software to their phones in the form of specific apps.

The reason why I've been talking about HTC specifically in this article is that I believe HTC is the only company capable of making this bold move. They have been in the Android business since the very beginning, they are not totally afraid of releasing phones without HTC Sense (they've made a Nexus phone in the past, and they are now making Windows Phone devices without HTC Sense) but most importantly, HTC is much better at making hardware than they are at making software. And they are in an economically problematic situation, so it only makes sense to let go of expensive parts of the company and simplify the production process. And they can do this without actually reducing the quality of the product, which is quite unique in the history of technology.

Of course, if this ends up being popular, other manufacturers will of course follow. But being first will give them a definitive if temporary advantage in sales, and it will also give HTC valuable time to adapt itself to this model. HTC can still ship ImageSense (basically hardware accelerated photo taking, a great feature of modern HTC phones) as a software plug-in to the standard camera application, and they can ship Beats Audio (an audio equalizer basically that HTC spent a serious amount of money to buy) as well. It is a new challange for the company to bring these technologies to the end users without doing so as a part of a custom skin, but it's certainly possible, and the company that figures it out first is going to have agreat advantage.

And if HTC were to follow this path, they would be free to focus much more on designing beautiful and sturdy phones, and hardware innovations, two things they are known to be good at. It would reduce their costs while in many ways improving their products.

So, do I consider it likely that they will actually take this approach in upcoming models? No, I do not. It would have made sense to do it with the HTC One lineup early this year, but they didn't. I think HTC thinks of Sense as something too good to let go of. And in some ways they are correct. There are a number of loyal customers that really like HTC Sense and actually buy phones for it. That's why the HTC Desire sold so well, and many of the owners of HTC One phones bought them for this very reason. But this group isn't big enough for HTC to survive, and I believe it is shrinking. At least, that's the picture I get when looking at recent headlines of significant profit losses for HTC.

/TB

Note: The reason why I almost entirely disregard from the Nexus phones in this article is that they are few in number, and they don't sell very well. The lack of choice is a problem when it comes to Android, since Android users are used to being able to pick a phone that fits their tastes, for example in size and materials. There have been some rumours about Google opening up for several companies to make Nexus phones at the same time, and it would be awesome it that's true. But for know, it seems like that was just a rumour. We'll see once the Google event actually happens.