We’re in meetings with HTC today discussing its current state and the company’s future moving forward. Jason Mackenzie, president of HTC global sales and marketing gave us a bit of insight into where the company feels it is currently struggling and how it plans to solve those problems. One way, perhaps, it through a huge push for Microsoft’s Windows Phone 8 platform.
“With all of the negativity around the industry we still remain profitable,” Mackenzie said. “Let’s not forget that at this time. We’re still optimistic and very optimistic. As HTC, we’re battling two behemoths, two big giants in Apple and Samsung,” Mackenzie said. “We started with the philosophy ‘our phones your brand’ and we would make them an extension of carrier brand.” HTC, if you’re unfamiliar, used to create white label phones for carriers and then the carriers would sell them under their own brand.
“Today, now you walk around the street and they say they use an iPhone, an HTC EVO, an HTC One, and that goes from the U.S. to Europe to Asia. OEMs brands and product brands are so important and there’s no question who David [vs. Goliath] is in that equation.” Even though HTC may feel like David right now, Mackenzie said that he knows HTC’s situation is better than others are portraying. Still, it has faced some issues that were created out of the company’s quick success.
“We have this “quietly brilliant” mantra,” he said. “We’re a humble company and actions speak louder than words. Over the last six to eight months the mantra has been a little bit of a detriment. We relied on that to be quiet and as a result we’ve seen a festering of negative news and nobody at HTC is standing up and saying “No, here’s why HTC is great.” That’s one thing you can expect to see a change in. We have to be more vocal and aggressive in the way we’re communicating.”
So why is HTC optimistic? Because Mackenzie believes that consumers still want, and need, choice. “A world where you only have Samsung and Apple is not a good world for the consumer and it’s not a good world for the ecosystem,” he explained. “That’s putting it bluntly. HTC is the best positioned company to be the challenger, but we have to act like that. Not just in product development but in the way we communicate to our consumers directly.”
HTC believes that it will survive by creating great products. “When you look at HTC we have a history of being a pioneer,” Mackenzie said. HTC, for example, was the first company to launch an Android handset in the U.S. “HTC has been first to market for almost every release of Qualcomm’s chipsets for the past four or five years. We also get strong support form our operators globally. They have a strong motivation to see HTC successful. While we don’t have the largest consumers of “fans,” they are the most engaged social community of fans. They’re awesome. Product is a part of everything we do. We’ve launched some good ones, some great ones and then some OK not so good ones in the past. We’re trying to consolidate the number of products we’re launching.” HTC explained that earlier this year during Mobile World Congress when it introduced its One line of smartphones.
Apparently that strategy is starting to pay off. “In Q2 the brand awareness has never been higher (70% brand awareness during the quarter) than ever before,” Mackenzie told us. “The HTC One has sold 2x faster than any other product franchise we’ve ever launched. We have a community of partners who are very supportive. The reach of the HTC One is broader than we’ve ever had.” Mackenzie admits that HTC still needs to continue to change, however.
“As an organization HTC knows how to change,” he said. “We’ve done it a lot. That’s huge. If you look at the history of HTC we’ve gone from an ODM for Palm, HP all of those guys. Our ODM business represented 40% of our revenue. We just turned that off in 2005. In 2007 our whole business was Windows [Mobile] and we decided to do Android. We shifted that and we knew the market was changing and we needed to get better in software and become a software company.”
“I’d be the last person to walk away and say everything is great and the sky is blue. There are things we gotta do. One is, increasing the speed at which we’re doing business and the speed of change, which slowed a bit due to high growth over the past couple of years. And communication. We have to make sure that we’re telling our product story of how “awesome” these things are to our consumers. We don’t have the luxury of brute force advertising to spend billions of dollars, so we have to be smarter at that and hit harder and be more aggressive in our advertising. We absolutely need to do better in order for us to take the next step.”
HTC’s strong pipeline of upcoming products is also keeping it optimistic. “HTC is extremely bullish on Windows Phone 8 and we’re going big,” Mackenzie said. “We’re going big on it and it has nothing to do with our position on Android, we’re going big on Android, too. We can compete aggressively with Android and Windows Phone at the same time. They are complementary and there’s an opportunity for us to be leaders in both platforms.”
HTC thinks its unique approach to design will also help it create better products. “When we look at the design there are a couple of reasons Windows hasn’t taken off, but there’s so much momentum now behind Android and iOS that it’s tough to get the attention of the consumer on this platform,” Mackenzie explained. “What we’ve seen is the consumers that buy the product like it and they don’t return it. What can we do right now to make it great? We look at it and we think, from a hardware perspective, the products have not been that exciting. OEMs have been giving varsity products to Android and Windows Phone hasn’t had strong super phones.”
HTC hopes to change that.