1. Analysis of HTC’s Performance to Date (as of 2009)
Delivering high quality products to the market, HTC has performed very well as a mobile handset provider by 2009. It seems that HTC’s change in marketing strategy to gain brand awareness was successful at that moment. Although increased cost on R&D weighs on its financial status, overall status of the company is still healthy enough. However, there are still several issues which the company has to address to achieve further growth.
Table 1: SWOT Analysis on HTC’s Performance in 2009
* Cutting-edge design technology * Manufacturing capability * Strong relationship with Microsoft| * Lack of original OS * Dependence on Microsoft * Scarce presence in the US market| OPPORTUNITIES| THREAT|
* Rise of Android OS * Declining former leading players| * Fast-moving industry trends * Rising cost in marketing and R&D * Strong competitors (Apple, Samsung)|
As the table above shows, HTC’s core competence is its capability in designing and manufacturing hardware by itself. The successful sale of HTC Diamond, the company’s latest model, proves that “designed by HTC” products could draw consumers’ attention. In addition, its own factory in mainland China made manufacturing process more flexible and independent from potential external risks. Moreover, robust relationship with Microsoft underpinned HTC’s credentials as a handset provider and helped the company which used to be a player in ODM market to enable to gain presence in consumer market.
HTC does not have software development capability and thus the company has to adopt OS from others. In year 2008, 89% of HTC’s revenue was generated by products with Microsoft platform, while emerging Android OS from Google accounted only 6%. This shows HTC’s heavy dependence on Microsoft platform, of which user experience is said to be not good enough at all. It would be crucial for the company to make right decision in its OS strategy.
According to a survey, share of Android phones in the smartphone OS platform market is expected to be double of that of 2009. Considering that this OS is completely open source offering application developers a platform for which they can freely deliver content and there are already about 3200 applications existed, the Android Marketplace is likely to be one of the most popular app markets in near future. While Windows Mobile, one of the major smartphone platforms at the moment, is struggling in developing updated version and it cannot catch up with fast-evolving smartphone trends, hardware makers including HTC have to consider changing their platform strategies. Indeed, HTC released first Android phone in the market. HTC should leverage this experience to become leading maker of Android smartphone.
Trends in the smartphone market change rapidly. It is very important for players in this market to sense a certain signal of shift and stay ahead of competitors. But this shift forces companies to invest significant resource in R&D and marketing. Even if a company successfully launches a groundbreaking product, that company has to keep investing in further development of the next product. Players have to manage shortened product lifecycle while reading market trends. Leading players in the market such as Apple, Samsung and RIM aggressively compete to take initiative and expand market share. They show certain competitive edge; Apple has ultimately user-friendly iPhone, Samsung has tremendous marketing power, and RIM has established reputation from business users. HTC has to acquire some elements to compete with these market giants.
2. Analysis and Recommendation on OS Strategy
1. Windows Mobile
Leveraging its experiences and established reputation as the leader in software market, Microsoft, the first major platform provider, still has strong presence in...