ColdFusion - HTC Phones - From Biggest Smartphone Maker to Nothing!

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Starting point is 00:00:30 HTC holds a very special place in my heart. During my brief stint in tech reviews, I used to review and modify HT phones while studying at university in 2009. In fact, the very first video that made me consider taking YouTube a bit more seriously, featured an HT phone. It was partly how this channel started. HTC understood design and attention to detail. They reminded me of the old-school traditional Apple methodology, but in the Android, world. Chances are, if you owned one, you loved it. HTC were a more influential player in the smartphone market than you might think. They made the first ever Android phone. They also designed

Starting point is 00:01:14 Google's Nexus devices, and at one point, they were the largest Android phone manufacturer, and the largest smartphone vendor in the United States, yes, even bigger than Apple. But as of today, their last phone was in May of 2018, and they've completely vanished from the public's consciousness. So how did this happen? Let's go back to a time before Samsung and the plethora of Android devices, a time when the mobile space was very different. Let's see the rise and fall of HTC. You are watching Tull Fusion TV.

Starting point is 00:01:58 This is Cher Wang. She was born in 1958 in Taiwan and studied in the United States. In 1981, she graduated from the University of California with a battle. specialist degree in economics. The next year she would join the Taiwanese firm, First International Computer, and here she learnt much about business operations. Many years later in 1997, Cher Wang had the desire to start her own company, and out of this, high-tech corporation, or HTC, was born.

Starting point is 00:02:32 Initially, HTC was a manufacturer of notebook computers, but just a year later, the firm would begin designing some of the world's first touch and wireless handheld devices. Early in my career, showing all PC monitor performance to customers all over Europe. Back then, not too many people had a personal computer. Within a few years, most of people has one. While I was dragging my 25-kil computers up and down a trend across Europe, Who I exhausted, I sort of dream about a small computer that fits into my hand that I could use to call my friends or listen to music. As soon as Windows C came out, I started HTC with my partners to achieve that dream.

Starting point is 00:03:29 A former work colleague of Wang, Peter Chow, took over a CEO in 2004, and from here, HTC started making Windows. mobile PDAs and smartphones. Cher Wang would come back later in the story. In 2008, HTC released the world's first device powered by Android, the HTC Dream. In the same year, they would release the first American 4G smartphone, and then they went on to design Google's first hardware phone, the Nexus 1 in 2010. CEO Peter Chow was known for his quick decision-making and

Starting point is 00:04:10 also his perfectionist mentality. He would take trays of smartphones at his desk and check every detail. Was the finish on the edges of the phone perfect? Did the joints of the phone line up with precision? Other staff would note that this was obsessive attention to detail. But on the other hand, Peter would criticise management decisions and override them with little discussion. This would later turn out to be a major problem within the walls of HTC. But for now, They were flying high. In November of 2009, the company released the HTHD2. It was the world's first Windows mobile device with a capacitive touchscreen.

Starting point is 00:04:56 Before this, all Windows phones are resistive touch, making them clunky and hard to use. This very phone was the device that started some initial buzz around the Cold Fusion channel. The HTC HD2 phone had a cult following and some online forums took great interest in the modifications I made to the phone. The resulting video views made me realize that there might be something to this whole YouTube thing. So in a way, I owe something to the company. In 2010, HTC was named one of the most innovative companies in the world. They were definitely a worthy rival for Apple in the United States and Europe. So why were they so successful?

Starting point is 00:05:36 Well, the company cared about design, both in hardware and software. Their phones felt premium in your hand. They were well proportioned and designed. proportioned and designed, often sculpted from unibody brushed aluminium. This was important. It was HTC and not Apple that introduced a unibody metal design. Apple would later copy HTC. Remember, this was at a time when Android smartphones were still plastic. The company was also featuring stereo speakers at a time when sound was an afterthought for many manufacturers.

Starting point is 00:06:15 HTC was well ahead of their time in this regard. The attention to detail by CEO Peter Chow was paying off. The second half of the successful design philosophy was in software. Windows Mobile was a big deal in 2009, although the interface was basically an ugly spreadsheet. To address this, HTC created a software skin that ran on top of Windows Mobile called Touchflow 3D, and it turned the boring spreadsheet look into something engaging and fun. As the world moved from Windows mobile to Android, the Touchflow 3D software would turn into HTC Sense, and it did wonders for Android at the time, because Android was a mess.

Starting point is 00:07:01 HTC Sense cleaned up a lot of the issues and gaps that existed. Users loved it, and the phones gained widespread acclaim. At this point, around 2010, HTC were on top of the world. So how did it go all so wrong? Samsung was looking at what HTC had accomplished, and they decided to make their own themed Android home screen, calling it TouchWiz. The Samsung GalaxyS in 2010 marked this change. Next, Samsung began flooding the market with their devices. HTC and Samsung both began to release phone after phone in a battle for supremacy,

Starting point is 00:07:44 but with deeper pockets and better marketing, Samsung's advantage quickly began to show. 2010 was a pivotal time for the smartphone industry. The general public was beginning to wake up to the fact that smartphones weren't just another PDA. They were actually changing the world. The smartphone boom was just beginning and as a company you had two options. Hit a ride or be left behind. Samsung was still largely unknown at the time, but they were coming up fast.

Starting point is 00:08:17 If HTC weren't careful, it wouldn't be Apple versus HTC, but Samsung versus Apple. The correct thing for HTC to do would be to double down on mobile. Pour money into research and development, advertising everything and anything to solidify their market position. Instead, they did something bizarre. They lost focus and they invested in unrelated markets. First, the company bought S3 Graphics, a PC manufacturer. The deal failed to create any new hardware for HT phones for their own company or to license to other smart phones. phone makers. HTC then looked to streaming content, investing nearly $90 million in two streaming

Starting point is 00:09:03 providers, On Live and Safron. Neither venture was fruitful. In 2011, HTC took a 51% stake in Beats Electronics for $300 million. They sold it for a profit of $56 million two years later. Just a year later in 2014, Apple came along and bought Beats for $3 billion. dollars. I guess HTC were just trying to make bets to diversify, but all of these ventures ended up failing. While HTC were spinning their wheels, throwing money at things that wouldn't help, Samsung was using its huge manufacturing arsenal. They got to work providing displays and flash memory for both their phones and for other major players, such as Apple's iPhones and even HTC's phones. While Samsung's market share grew, its hold on its competitors also

Starting point is 00:10:00 became stronger. The Korean company chipped away at HTC's dominance, bit by bit. Admittedly, these punches would have been difficult for HTC to handle, but it was their next mistake that made things even worse. From 2009 to 2013, HTC centered its marketing strategy around two words, quietly brilliant. The company believed that the quality of their products and the brand would speak for itself. I remember using HDC phones back in the day and thinking that that was true. People just had to use it

Starting point is 00:10:38 and then they would love it. Their early phones were second to none, but the thing was, when you asked around, no one really knew who they were. Unfortunately, this would prove to be a big problem. While HTC was being quietly brilliant, Samsung was mocking Apple fans in their advertising.

Starting point is 00:10:58 The campaign was a classic, and thrust Samsung into the spotlight. It inflamed a war between Apple and Android users so large that it only started to fade just a few years ago. By 2011, HTC's market share had shrunk in half from 67% to 32%, while Samsung's market share grew more than 5-fold, from 4% to 27%.

Starting point is 00:11:22 In the next year, Samsung was seeing year-over-year growth as highest 300% and Apple, 200%. Meanwhile, HTC was practically standing still. They just had a mere 17% of year-over-year growth. The naming schemes of HTC phones made things even worse. They had wacky names like Char-C-T-Rsa, Vivid, Velocity, A maze. They even repeated names like the HTC-1 confusing buyers.

Starting point is 00:11:52 Is this the new HT-1 or the old one? For Samsung at the time, the naming scheme was simple. Their premium phones were just the GalaxyS brand, followed by a number. Despite winning design awards in 2013, the damage had been done for HDC. Within the company, Peter Chow's criticism of managers, along with the hiring of foreign executives, led to morale problems and confusion over responsibility. In 2013, HTC lost their vice- This episode is brought to you by Accenture. When your advertising operations fall out of sync, everything else follows. Spotify and Accenture are working together to reinvent the rhythm of ad sales,

Starting point is 00:12:38 using automation, analytics, and smarter workflows to simplify campaign delivery and access better data across the business. The result? Less time spent on operations, more time connecting brands with the moments and fandoms that matter most. Learn more at Accenture.com slash Spotify. President of Global Communications, Retail Marketing Manager, Director of Digital Marketing and Product Strategy Manager. Their marketing department was in shambles. There was great upheaval and disarray within the company.

Starting point is 00:13:10 Microsoft began to sniff at the crumbling company. They were in negotiations to purchase HTC, but Microsoft would go for Nokia instead. By 2015, Peter had resigned and Cher Wang returned as CEO. Things gradually got worse for the company, and in 2015, their share price fell over 60% in that year, and 90% since 2011. It was so low that it fell off the main exchange in Taiwan's stock index. HTC had to cut over 15% of its global workforce as a result. It was during this time that Cher Wang knew that the company needed a new direction. So what was she going to do?

Starting point is 00:13:54 Smartphones were a thing of the past for them. They needed to think of something new. The answer would be virtual reality headsets. In collaboration with Valve, they would begin manufacturing VR headsets in 2016, and as of today, the headset seemed to be relatively successful in their own right. HTC owned about 13% of the VR market. However, in 2017, Google would step in and acquire half of their research and design. for $1.1 billion.

Starting point is 00:14:29 In 2018, HTC would lay off a further 22% of their global workforce. Currently, HTC has completely taken their focus away from phones and has shifted to emerging technology, virtual reality, blockchain, artificial intelligence and machine learning, to name a few. It sounds like it's going to be a tough road ahead, but if they can get a strong foothold in the VR space or any one of these spaces, we could see a rise in HTC again. In late 2019, Eve Meita took over a CEO.

Starting point is 00:15:06 He remains optimistic about the future of the company. In Q2 of this year, HCC posted its fifth consecutive quarterly loss. Last July, there were some pretty large layoffs of the company. I think it was about a quarter of the staff. So my first and I think most important question for you is, why would anyone want to take this job? That's a good question. balance sheet of the company is a very strong asset. We have zero debt, we have a lot of

Starting point is 00:15:35 assets, the side of the brand, of the IP, outside of the building, we have one billion cash. So yes it is a challenge but we have a lot of strengths and I personally to believe that there is a lot to be done to refresh the company and to make the company being leading company in the next few months and a few years again. I'm strongly believe that there is here a fantastic challenge and And we will get there. You will see who will get there. HTC were once the largest smartphone vendor in the United States

Starting point is 00:16:09 and the largest Android maker globally. Their fall is almost as impressive as their rise. From weak marketing to poor business moves, to unclear management and confusing naming. The story of HTC can tell us something. In the modern world, which is so noisy and loud, a quiet brand that makes great products isn't enough anymore. If you stand still and think that the quality will speak for itself, the competition will surpass you before you know what's happened.

Starting point is 00:16:38 So that's the end of HTC phones, or is it? Last year, the company stated that they were going to be making a 5G phone, so we're going to have to watch this space. So did you know about HTC, and if so, what was your favourite phone? If you want to see any of my other mini documentaries on smartphones, I've done one on the internet. individuals that actually came up with the ideas that created the iPhone, and another one on the rise and fall of Blackberry, and one more on the history of Android and iOS. But if you're not interested in that, I have hundreds of videos on this channel that are worth binge watching. So this has been to GoGoGo and you've been watching Cold Fusion. I'll see you again soon for the next episode. Cheers, guys. Have a good one.

ColdFusion - HTC Phones - From Biggest Smartphone Maker to Nothing!

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