HTC hasn’t technically given up on smartphones. It regularly updates the high-end One series and pumps out crates of cheaper models largely for Asian consumers. But the company’s world market share fallen so far from a 2011 record of 10.7% that it was tempting to delink the brand from the product, especially as HTC has focused more convincingly over the past year on virtual reality gear. But now the Taiwanese firm with a market share now at 2-3% is widely expected to recover a bit of share with the Google Pixel smartphones that were announced Oct. 4.
HTC made the hardware – always its strength – for these high-end phones and Google installed an Android operating system. Google is also the official brand and does the phone’s marketing. The Pixel and Pixel XL devices start from screens of five inches. They run on a super-powerful Qualcomm Snapdragon 821 processor and include highly rated selfie cameras. The XL’s screen has an unusually high density of 534 pixels per inch. Its Google Assistant voice command feature is also getting stronger reviews than Apple’s Siri, one consultant notes. Users will find in the phone support for Google's Daydream VR platform.
HTC may have won the Google deal because Chinese smartphone giant Huawei decided against it, a tech industry consultant in Taipei says. It’s looking like Huawei’s loss.
“To me, the Pixel move represents a return to HTC’s old roots from way back in even the Pocket PC and Windows Mobile days when it built products for other OEMs,” says Bryan Ma, client devices vice president with market research firm IDC Asia-Pacific and Worldwide. HTC was born in 1997 as an equipment contractor. “Given the challenges that HTC has had with its own brand as of late, it’s not surprising to see the company take advantage of an opportunity from Google to leverage its old roots and core strengths, including engineering and manufacturing.”
HTC has worked before with Google on Nexus devices and the first commercially sold Android product, the HTC Dream, the company’s suburban Taipei office says. “We’re proud that when Google needed an industry-leading partner for the Pixel, HTC was the clear answer,” it says in a statement to Forbes.
The company taken off Taipei’s blue chip index last year needs the revenue as own-brand shipments falls this year to 10 million despite a capacity of 44 million in 2011. Revenue went up by almost a third last month year on year. HTC is expected to call off any own-brand, high-end smartphones for the rest of the year and see how the Pixels sell at $649 to $769 per unit, says Eddie Han, an analyst with Taipei-based Market Intelligence & Consulting Institute. “The unused capacity can be eliminated by strong sales of a star product or contract manufacturing,” he says. “Therefore, contract manufacturing for Google seems to be a way to go for HTC as far as revenue is concerned.”
Pixels will still make up just less than 1% of all smartphones sold worldwide this quarter, market research firm Strategy Analytics forecasts. It would take time to get global traction. But Strategy Analytics tips the Pixel to attract “young-minded, affluent consumers” who are used to high-end phones yet put off high iPhone prices and Samsung Galaxy Note 7 safety hazards. “Google Pixel is a prestigious win for HTC,” Strategy Analytics executive director of global wireless practice Neil Mawston says. “It could prove to be the model that stabilizes the sinking HTC ship.”
