The encyclopedia · Product & Design · Strategic decision · 2008–2018
HTC was the largest smartphone maker in the US — then it lost 99% of its value
HTC went from 24% US smartphone share to 0.5% in eight years, undone by marketing neglect, patent wars, and a failure to build a brand consumers wanted.
HTC · 2017-09-21
What happened
HTC was founded in Taiwan in 1997 as an ODM for laptops and PDAs. It became a co-founding member of the Open Handset Alliance and launched the first Android phone, the HTC Dream, in 2008. By Q3 2011, HTC was the largest smartphone vendor in the US with 24% market share, and its brand was valued at $3.6 billion.
The decline was swift. HTC neglected marketing while competitors Samsung and Apple poured billions into brand building. Apple filed a patent complaint in March 2010 that led to import bans on HTC products in the US by 2012. The company recorded its first-ever quarterly loss in October 2013. Revenue collapsed from TWD 465 billion in 2011 to TWD 5.8 billion in 2020.
In September 2017, Google acquired roughly half of HTC's design and research staff and non-exclusive IP licenses for $1.1 billion. By 2018, HTC's market share had fallen to less than 0.5%. The stock price fell 90% from its 2011 peak. The company that had defined the early Android era effectively exited the smartphone business, pivoting to VR and IoT that have never matched its former scale.
Why it happened
- HTC built devices but never built a brand. While Samsung spent billions on marketing, HTC relied on carrier partnerships and assumed consumers would discover its phones. They did not.
- Patent wars with Apple drained resources and disrupted US sales. An ITC ruling in 2012 banned imports of some HTC models, handing market share to competitors at a critical moment.
- HTC failed to diversify beyond the handset business. When smartphone sales collapsed, the company had no other revenue stream large enough to absorb the losses.
The lesson
Being first to market does not create a brand. Being first to the consumer's mind does. HTC won the technology race and lost the marketing race.
Sources
- HTC — Wikipedia
- TechCrunch — HTC is gone (HTC's decline, Google acquisition of HTC team, end of smartphone era)
- BBC News — HTC's fall from smartphone king to also-ran (HTC's rise and fall, market share decline, brand neglect)
- The Verge — HTC's 'Change' campaign with Robert Downey Jr. (HTC's marketing efforts, brand struggle, decline)
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