For the past two years HTC’s meteoric rise has coincided with the rise of Android. Their excellently designed phones brought them to the top of the heap amongst Android manufacturers and proved popular with early adopters. Now, the markets have matured in HTC’s core markets of Europe and North America and HTC is struggling. Growth has come to a halt and their share price has dropped 30% in the last month alone. Phones are converging in terms of specs and features. We are no longer seeing huge technological and design advantages from one phone to another (with respect to the flagship phones of the top three brands: Apple, Samsung, and HTC). Differentiation in this market is increasingly going to be based on brand rather than product. This is the reason for HTCs recent decline. It is in the area of branding that HTC struggles vis-à-vis its competitors.
Up until four years ago HTC was an OEM manufacturer, selling unbranded phones to be branded by others. When it did launch its own brand, it positioned it with the tagline: “Quietly Brilliant”. Their message: you don’t need to get a phone, you need a phone that gets you. This message was remarkably salient at the time. It’s hard to imagine, but three years ago, Blackberry was the market leader, and this message made sense. RIM had a consumer de-centric push strategy when it came to innovation. You got what RIM was making. New e-mail enterprise XML suite anyone? An easy to use, intuitive, phone that paid attention to how you used it was still a relatively new concept and this was what HTC was trying to get across. Today everyone innovates according to the needs of the consumer, and Apple, not HTC is leading the way. HTC needs to update its brand.
The recommendation here is actually inspired inspiration by an interview with HTC CMO John Wang. The full quote goes like this:
When we looked at ourselves, we said, “We are quiet. And we are committed to innovation.” “Quietly Brilliant” is about doing great things, in a humble way. This has a universally good meaning around the world. It was our personality, and the idea emerged naturally from there.
But we also understood that people spend $400 to own a phone, not to own a personality. At the center of “Quietly Brilliant” is the consumer, not HTC. So we emphasized the phone, and looked at the world through the consumer’s eyes.
*The illusion of asymmetric insight is the theory that a cognitive bias exists where people perceive their knowledge of their peers to surpass their peers’ knowledge of them.
Early adopters didn’t buy phones to own a personality, they buy them for their functionality, and this positioning worked. In HTC’s core markets of Europe and North America, the markets have matured to the late adopter stage. In this stage the customers are much more brand conscious, they are aware of what their phone says about them. These customers are buying the phone for a personality. The “humble yet great” brand personality is still a great idea for the brand. It’s part of the company culture, it is imbued into their products, and it will authentically set the brand apart. HTC can repurpose “Quietly Brilliant”. It can reposition itself as the brand for the quiet achievers: the writer typing away at his first novel, working a day job to pay the bills; the math student who dreams of being an actor; and everyone who feels that they have more to offer than what the world sees (which, thanks to the illusion of asymmetrical insight, is pretty much everyone)*. The message would be: if someone is using an HTC, look closer...
Read Tony's previous post: The Long Sell
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