Without It's Own Horse HTC Could Be On The Sidelines

One time high flyer has crashed and headed for tough times

The mobile device market is a brutal place where only the very strongest survive. If you don't have your own horse in the race, you can easily go from first to back in the pack pretty quickly. Now it looks like one time industry darling, HTC may be one of the first casualties of the Google-Motorola Mobility merger.

HTC rode the Android wave and was one of the leading Android headset makers, even producing a Google Nexus phone. But with Google's own Motorola rising rapidly and Samsung becoming the king of the Android roost, HTC has been pushed down to also run status.

After seeing their stock price nearly triple in 2010, HTC released very disappointing results and their shares have fallen 42% in late 2011. More importantly in guidance released by the company they don't see any big changes in the horizon which can change this recent trend very quickly.

So what happened at HTC to cause this situation?  Well some blame hardware, some blame software. I blame not having a horse to call their own. 

On the hardware front many say that HTC came out with too many models, none of which was truly a flagship or stood out from the crowd. In fact many were even sub-par with poor battery life, bulky when thin is in and just nothing special.

As to the software, Android with the latest Ice Cream Sandwich (ICS) may have outgrown HTC's Sense skin which now seems like an unnecessary layer in the software stack. HTC doesn't update their phones as often as some others, though there is a great community of people who put out hacks for HTC phones.

Another thing HTC did was try to make a phone for everyone. They make phones for ATT networks, Verizon, Sprint, T-Mobile and everyone else. Besides Android, they also make Windows phones. At the end of the day though, they don't really have any special relationship with any carrier or phone OS.  It is this fact that I think ultimately spells trouble for HTC.

I think they realize this and there is talk of them coming out with a Facebook branded phone.  Unless it has some special Facebook functionality though and there is some exclusivity to HTC for it, it could be another Android for HTC. Their early market leadership could give way to another company having a cozier relationship with Zuckerberg and company.

What HTC needs to do is claim their own horse in this race.  They have the financial muscle to do it themselves or could partner with someone. Perhaps, Facebook, but probably not.  A few other candidates are also options.  Mozilla is one I would like to see them work with. Mozilla needs  a platform that will make its browser the centerpiece. Not Safari, Chrome or IE, but Firefox.  Entering into a relationship with HTC could see Mozilla branded devices as a viable alternative to the Apple/Google-plex.

It is also why I thought WebOS might be a good play for HTC. This would remove them from any Android me too.  They could run with the open source WebOS and make it their own. HP might even be willing to help out financially and with other resources if HTC were to run with this.  In a grand triumvirate, HTC working with Mozilla and HP might actually bring a competitive  4^th mobile OS to the market that would give the other three a run for their money.  

Of course that might just be wishful thinking on my part. But frankly without really having their own horse in this race I don't see HTC being a player going forward. The same is true frankly for Mozilla.  The world is going mobile and if you don't have a horse in the race you will watch from the sidelines.

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• Alan Shimel
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