The encyclopedia · Marketing & Brand · Marketing decision · 2014
HTC made the best Android phones — and nobody knew because the marketing was terrible
HTC's One M7 and M8 were the best Android phones of 2013-2014. But Samsung spent 10x more on marketing, and the brand faded.
HTC · 2014
What happened
HTC, the Taiwanese manufacturer that built the first Android phone (the T-Mobile G1 in 2008), released the HTC One M7 in 2013 and the One M8 in 2014. Both were critically acclaimed as the best Android phones available: premium metal bodies, excellent screens, innovative cameras and clean software.
But HTC's marketing budget was a fraction of Samsung's. Samsung spent over $11 billion on marketing in 2013; HTC spent roughly $1 billion. The Galaxy S4 and S5 were everywhere — billboards, TV ads, sports sponsorships — while the HTC One was a reviewer's favorite that most consumers had never heard of.
HTC's market share declined from over 10% in 2011 to under 1% by 2017. The company sold its phone design team to Google in 2017 and effectively exited the premium phone market. The case illustrated how a superior product can lose to an inferior one with better marketing, and how in consumer electronics, brand awareness is as important as product quality.
Why it happened
- HTC's marketing budget (~$1B) was a fraction of Samsung's ($11B+), limiting brand awareness.
- The HTC One was a reviewer's favorite but unknown to most consumers.
- Samsung's marketing machine made the Galaxy S4/S5 ubiquitous, regardless of product quality.
- HTC's market share fell from 10%+ to under 1%, and the company sold its design team to Google.
The lesson
The best product doesn't win — the best-known product wins. HTC made a better phone; Samsung spent 10x more telling people. Brand awareness is a feature.
Aftermath
HTC sold its phone design team to Google in 2017 and refocused on VR (Vive). The HTC brand continues in a diminished capacity. The case is cited as an example of how marketing spend can trump product quality in consumer markets.
Sources
- HTC — Wikipedia (One series, market share decline)
- HTC's decline: lessons from a fallen smartphone giant — UBOS
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