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As sexy as the HTC One is, it is doomed to failure if the company doesn’t quickly shake things up.
HTC’s design and software teams did their jobs in creating an attractive, unique, and premium-feeling phone, taking Apple’s love for metal construction and taking it to the next logical progression.
But guess what? HTC’s One family of phones met with similar critical praise last year, yet failed to reverse its flagging revenue and profits. While HTC has had a history of showing off buzz-worthy products, dating back to the first Android smartphone in the G1 and the first 4G phone in the Evo 4G, the company has more recently shown a troubling trend: the tendency to get ignored in the marketplace.
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It’s the reality of the smartphone business and a key dilemma for a company like HTC, which lacks the marketing firepower that larger rivals Apple and Samsung enjoy. This year will be a critical one for HTC, which needs to prove that it can still compete in the increasingly duopolistic market. History has already shown that a sexy, new product just enough anymore.
“HTC is going up against two of the biggest spenders in the world with intensely loyal followings,” said Avi Greengart, an analyst at Current Analysis.
So HTC needs to do a few things it hasn’t been comfortable doing in the past. For one, it’ll need to get more proactive with its own marketing. It’s something the company has always half-heartedly done in the past, but it will need to work harder to develop both the One brand and the HTC name. Apple and Samsung are household names, and while HTC was seemingly on its way to becoming one just a few years ago, it lost its way.
“I think they need to invest a tremendous amount in marketing,” Greengart said.
The company will also need to break from its traditional reliance on the carriers for support, and stop kowtowing to all of their needs. That’s a particularly difficult one because that had been HTC’s tentpole strategy for so long. But as Apple and Samsung have moved beyond carrier exclusives and customizing phones, HTC must do the same.
HTC appears to be on the right track. The company plans to roughly double its global marketing budget from a year ago, as it embarks on a new campaign, according to Erin McGee, vice president of marketing for HTC’s North American business. The company plans to be the second or third largest advertiser in the industry during the launch period.
But in acknowledging the relative limits of HTC’s marketing resources when stacked against its rivals, McGee said the company would target tech-savvy adults aged 18 to 34 through digital advertising and social media. While the company wouldn’t talk about the details of the campaign, McGee said that in the U.S., HTC would run its promotions alongside music events it plans to organize through its Beats partnership.
Sarah Tew / CBS Interactive
HTC executives also conceded that they had relied too much on the carriers in the past, and vowed to take more of a direct role in the purchasing experiencing. McGee said a lot of the advertising would focus on generating awareness and demand before the consumer went into the store, so there would be less reliance on a carrier salesperson.
“This is by far our best device, and it’s our job to make sure people know about it,” she said, noting that the campaign would be much more focused than before.
HTC plans to get some support from Best Buy, which it mentioned as being another distribution outlet beyond AT&T, Sprint Nextel, and T-Mobile USA.
Best Buy plans to jointly run some national commercials featuring the HTC One, according to Allister Jones, head of marketing for the big-box retail chain’s connectivity business group. He added this was the most resources that Best Buy has put behind HTC in at least 18 months.
Likewise, the HTC One will be featured prominently in Best Buy’s stores, occupying one of the coveted “end caps” of the mobile area, where the latest and greatest are displayed.
Jones conceded that he was really worried about HTC’s products over the past few years, but said he was excited about the One.
Hands-on with the sleek, gorgeous HTC One (pictures)
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“This is a real serious contender,” he said.
All of HTC’s attempts may be for naught. While the company was smart to get its phone out ahead of the noisy Mobile World Congress conference next week, it will still need to brace for the looming announcement of Samsung’s Galaxy S4, which is slated to be unveiled in less than a month, likely a few days before the One hits stores.
But HTC is off to a better start than last year, having more carriers than ever committing to a single smartphone. It also features a design and user interface that some believe will set it apart from the Android pack.
But HTC’s bet on a single flagship phone means a lot is riding on its success. If the One doesn’t turn out to be the one, the company isn’t going to have a lot of options.
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