HTC out of court, out of luck

Tuesday 13 November 2012 11.38
HTC didn't release bad products, just not fantastic ones
HTC didn't release bad products, just not fantastic ones

Patent War observers will be happy to see the end of the Apple/HTC litigation that briefly saw a number of products pulled from the shelves in the US. It's not exactly been as acrimonious or high profile as the former's knock down drag out scrap with Samsung, but it has shown us a lot about the punitive power of the patent and how cross-licensing can be used as a strategy for both parties to walk away feeling like they got something.

It also says that HTC is no longer a player in the consumer smartphone market.

As a trillion-dollar company with enough cash reserves to wipe out Ireland's national debt, Apple has had the wherewithal to pursue patent cases with a particular kind of venom, using protracted litigation to eat up competitors' potential research and marketing budgets. The longer and more complex the litigation the more it perceives its opponent as a threat. So far only Samsung has been able to stand up to the strategy and has won some big victories - most notably in the UK where Apple was forced to run print advertisements explaining how the Galaxy Tab and the iPad are entirely different offerings. Ironically, in trying to squash Samsung on so many fronts Apple has turned the South Korean company (and parts supplier to its own products) into a bona fide nemesis. Samsung plays in all the spaces Apple does (and a few more giving its Note 'phablet').

HTC's situation as the fifth largest smartphone manufacturer (and not a lot else) is far more delicate. Having vacillated on tablets - the Wildfire S was a bust but the Flyer is widely available - the company has seen its global smartphone market share drop steadily from a peak of over 10% to a mere 4%, according to analysts IDC. This contrasts with Apple's 15% and Samsung's 31.3% - figures are likely to shift even more as the Christmas period closes in and we know more about iPhone 5 sales. Even worse, the company's losses continue to balloon.

What happened to HTC? The lack of an identifiable 'anti-iPhone' among a fragmented product range would be a good place to start. Remember the Dream, Hero, Wildfire, Sense? Probably not. How about a novel marketing campaign? No joy there either, there never was one. The solution, the HTC One series, has met with lukewarm sales, largely due to the superiority of the Samsung Galaxy S III. The approach is finally right but the product isn't compelling enough. The less said about the flipping of Beats Audio the better - consumers don't buy phones for a decent sound system. Lesson learned.

It's not all bad news and a pivot towards the business space may be a route back to commercial viability. Microsoft CEO Steve Ballmer has been full of praise for the company at the launch of Windows Phone 8. Of course the last company to receive that kind of glowing praise was Nokia - a whole other disaster.

HTC didn't release bad products, just not fantastic ones. Apple will happily take the hit on licences but it's mostly 'go away money' and a slap in the face to one of Android's first boosters. The goal of crushing Android remains and won't be decided here, but you can imagine Tim Cook will derive at least some satisfaction from relegating HTC from boutique brand to fringe player. Who's next?

Niall Kitson is editor of TechCentral.ie