HTC’s Struggles Mirror Nokia Downfall

by Matt Klassen on November 29, 2011

The annoying thing about innovation is that it only remains innovative for a short period of time, soon copied and improved upon by your closest competitors; a vicious cycle that always seems to demand more…well, innovation.

It’s a problem that global smartphone powerhouse HTC has encountered in spades, as the world’s 4th largest handset manufacturer has seen its once popular line-up of innovative devices steadily lose ground to both Apple and Samsung.

If you’re experiencing a little déjà vu, it’s likely because we’ve all heard this story before with both Nokia and Research in Motion, companies who rocketed to the top of the mobile market only to endure the arduous and humiliating drop to the bottom floor because of their inability to continue to compete.

For its part, HTC is confident that it will not become another Nokia and apparently the best way to avoid a similar fate is to do exactly what Nokia did as it slid to the bottom, release flagship phone after flagship phone.

HTC has announced that in an effort to bolster its recently stagnant mobile innovation the company would be releasing a series of high-end phones in both the American and global markets. “We will focus on the product next year, better and more competitive,” company CFO Winston Yung told Reuters. “Other than new LTE phones for the U.S. market, we have phones for the global market. We will launch some worldwide flagship products. We’re confident in them.”

For those that may not remember Nokia’s ongoing flagship phone debacle, it began when the company finally admitted it was losing its share of the mobile space because of its inability to innovative in the smartphone sector. The company rolled out flagship phone after flagship phone, throwing all the company’s marketing and R&D weight behind each device, only to see each one subsequently fail, tarnishing Nokia’s mobile image and driving the Finnish company farther down the sales charts.

The problem for Nokia was twofold: design and attitude. In regards to the former, Nokia steadfastly refused to change is smartphone form factor and the bottom line was that smartphone users got tired of it (that is if they ever got interesting in the first place). HTC, according to various investor firms, suffers from the same stagnation. “Its industrial design hasn’t changed for almost two years. Unless it launches a really different phone, it’s hard to sell the product at a premium price,” said Roxy Wong, analyst at Mirae Asset Management in Hong Kong.

The difference between Nokia and HTC, however, may be one of attitude. Nokia’s continued failures were due simply to the fact that the company was too stubborn to admit it didn’t know what smartphone customers wanted, thus producing unappealing phone after unappealing phone.

HTC, for its part, strikes me as far more humble; meaning that if it realizes that its past innovation is now today’s mobile garbage and seeks to radically improve its design, the Taiwanese company could reverse its fading fortunes…whether Nokia will ever be able to reverse its market nosedive is a completely different story.

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Written by: Matt Klassen. Follow by: RSS, Twitter, Facebook, or YouTube.

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