HTC won’t help its shrinking share by shrinking a phone

by Steve Blum • , , , , , ,

It used to be bigger.

Combined, Samsung and Apple are selling about half the world’s smart phones, with 30% and 19% market share respectively in 2012 according to IDC. Much of Samsung’s growth from 19% in 2011 came out of HTC’s hide. Its share was cut in half over same period, dropping below 5% and putting it more or less in a tie with Nokia and Blackberry.

At least it was still in the top five then. Now, the most recent quarterly figures for 2013 have LG, Huawei and ZTE pulling ahead, with HTC (and Nokia and Blackberry) dropping further into commodity class. Judging by its latest competitive move, it’s destined to stay there.

This week, HTC previewed the HTC One Mini, a smaller version of its flagship phone. It’s a nice enough addition to the product range. Some consumers will like the size and feel of it. But its impact on HTC’s market position will be minimal. The HTC One Mini doesn’t offer anything new that might otherwise make it significant. Trading a smaller form factor for lower performance specs and price is pretty ordinary.

The mobile handset market is dividing into genuine consumer brands – Apple and Samsung in the lead – and generics. HTC’s problem is that it’s landing in the generic space. Older brands – Nokia and Blackberry – are still recognised, but not bought. HTC never climbed to that height, and its current marketing efforts are swamped by Samsung’s media saturation campaign and Apple’s reality distortion field.

A few tweaks to its product mix won’t build the brand identity it needs even to just get back into the top five.