HTC says to tough out downturn, new models coming
(Reuters) - HTC Corp promised competitive new models early next year and said it would stick to its strategy in the face of its biggest challenge since rising to prominence in the smartphone market. — HTC has become the worst performer …
Context & Ripple Effects
HTC entered this announcement after cutting its revenue forecast by as much as 23 percent, with the company citing weakening demand and pressure from Apple and Samsung in the U.S. market. Its answer is to preserve its existing strategy and make the next handset cycle the test of whether it can restore competitiveness.
First-order effects
- HTC ties its near-term response to promised competitive smartphone models early in 2012, rather than a change in corporate strategy.
- Apple and Samsung remain the named competitive benchmarks against which HTC's next models will be judged as demand softens.
Second-order effects
- HTC's lower outlook raises the stakes for a successful model refresh: its ability to defend demand depends more directly on product competitiveness than on a revised strategic plan.
Third-order effects
- The episode points to a handset market in which vendors facing slowing demand must sustain rapid model cycles to protect position against better-established rivals.
The trend: Smartphone competition is shifting the burden of recovery onto the pace and competitiveness of each vendor's product refreshes.