HTC is rebooting after a difficult year, with the launch Tuesday of an upgraded version of One, its flagship smartphone. But if HTC can't improve the marketing of its devices, the company will have a hard time turning around its fortunes.
HTC continued to struggle last year in the shadow of Apple, Samsung Electronics and more successful challengers like Huawei Technologies, LG Electronics and Lenovo. While they all increased their smartphone shipments, HTC's total shipments dropped, despite a smartphone market that grew by over 40 percent, according to Strategy Analytics.
The year was capped off with a fourth quarter in which HTC's net profit dropped precipitously.
"HTC had a nightmare 2013 and will want to forget it quickly. The company lost a large piece of its market share in 2012 and that carried on last year. It hasn't been able to stop that slide," said Neil Mawston, executive director at Strategy Analytics.
There is little doubt that HTC will put out another competitive smartphone Tuesday, but that isn't enough, according to Roberta Cozza, research director at Gartner.
"We are in a market where having one of the best smartphones design-wise and feature-wise really doesn't help if your brand doesn't resonate with consumers. With HTC, the marketing hasn't been strong enough," said Cozza.
Last year's marketing campaign with actor Robert Downey Jr. may have increased brand awareness. While HTC doesn't have Samsung's marketing budget, Cozza and Mawston agreed that HTC has to better explain what sets its products apart from the competition, if the company wants to increase sales and ultimately survive.
The second iteration of the One is expected to have a 5-inch full HD screen and a Snapdragon 801 processor with four cores running at 2.3GHz. The phone is also rumored to have two cameras on the back that will work together to produce better images.
An improved camera has been one of the main themes on smartphones HTC's newcomer will compete with, including the Sony's Xperia Z2 and the Galaxy S5 from Samsung, They were launched at Mobile World Congress last month and will go on sale in April, with the S5 starting to ship on the 11th.
The smartphone market is anticipated to heat up further with a successor to the G2 from LG Electronics and a new iPhone as early as May or June.
HTC has already introduced three new phones this year: Desire 310, Desire 610 and Desire 816, which are all part of an increased focus on the midrange of the market. But a successful high-end model is key for any smartphone company, because it can both help improve profits with better margins and create a trickle-down effect for the rest of the portfolio.
That HTC's new flagship smartphone becomes successful in the U.S. is especially important, because that's where the company's current troubles started.
"Essentially what happened to HTC was that it lost big in the U.S. to Samsung and Apple. That seemed to set off a domino effect around the globe and HTC didn't have enough presence in China to offset that," Mawston said.
HTC clawing back some market share in the U.S. would be a big first step in the right direction for the company.
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