HTC rolled out its One lineup of smartphones---One X, One S and One V---in a bid to put the company on better footing. What's unclear is whether HTC's quad-core One can put the company on the fast track again with power users who may hold out for the latest Samsung Galaxy S3 and Apple iPhone 5.
The once-highflying smartphone maker has seen its sales growth dwindle as other rivals such as Samsung push out thin devices. Before the One lineup showed up HTC was looking beefy relative to other designs. And that's bad news since power users are more likely to bring their Samsung and Apple devices to work.
- It cut down the numbers of models. See CNET: 'HTC One' brand, Sense 4.0 hearken new phone strategy
- HTC is focusing on quad-core processors in a bid to leapfrog both Samsung and Apple by roughly two to six months;
- The company honed its camera and audio features. CNET: HTC One X is HTC's quad-core, ICS, Beats Audio powerhouse (hands-on)
HTC's One is getting a good initial response. The problem is this: The Android Ice Cream Sandwich market is crowded. And quad-core is being talked up by Huawei and LG.
Related: HTC: One X and S with Snapdragon S4 | MWC 2012: HTC unveils the One series in three flavors, two bound for U.S. carriers | The Android game is so hard: HTC yesterday, Samsung today, Huawei and LG tomorrow | HTC's Q1 outlook stinks: Is Q2 rebound theory wrong?
According to HTC executives, the second quarter will show the fruits of the One strategy. Analysts aren't so sure. Here's a look at a few of the big issues facing HTC:
- Quad-core won't count for much in the performance department. Barclays analyst Dale Gai noted:
One X is not the only quad-core CPU smartphone at MWC – LG’s Optimus 4x (by Nvidia Tegra 3) and Huawei’s Ascend D quad (by in-house ARM A9 chip; K3V2) were also announced today. We expect quad core smartphones to offer limited differentiation in terms of hardware performance and price competition to intensify in late 2012.
- Any lead HTC gets will be short lived. HTC will get a jump with its One lineup, but Samsung's Galaxy S3 and iPhone 5 are a threat in the second half. Morgan Stanley Jasmine Lu said:
We applaud efforts to stay ahead of the competition in hardware design upgrade, focusing on high-quality camera experience and authentic sound on top of a powerful CPU and advanced wireless technology. Yet we believe that HTC will not be able to maintain its lead in most of the key features for more than 1-2 quarters without competitive pricing.
- Hardware is hard to differentiate. Lu added that HTC's latest improvements are "good but not cutting edge." "Power users might not upgrade their devices" to the HTC with the iPhone 5 and Samsung Galaxy S3 looming.
- HTC lacks manufacturing scale. Samsung and Apple will launch new phones and hit high volumes. HTC isn't likely to see those economies of scale. "HTC is likely to see reduced economies of scale in manufacturing, we expect its shipments would be only 1/2 or 1/3 of those of Samsung or Apple in 2011 and 2012, and follow a similar story to that of Ericsson from 1999-2003," said Daiwa Securities analyst Alex Chang in a research note.