This morning we shared the news that, along with the iPhone 4S, Samsung’s Galaxy S 2 is destroying the competition in terms of pre-Christmas smartphone sales. With low-end phones enjoying decent success at the other end, is a struggling HTC soon to meet its middle-ground maker?
The Samsung Galaxy S 2 is 8 months old. That’s old enough in the always-moving phone market to ensure that it should drop right off the sales chart. Except it hasn’t. It’s still selling by the bucket load. Has Android stagnated, or is the S 2 genuinely world-beating? It’s not really that simple…
Something’s started to happen to Android that’s left it with a very distinct set of sub-markets, the likes of which it’s never had before. Whereas in the beginning of the platform’s life most Android phones that hit the shelves were all fairly top end, there now exists a much larger range of devices thanks in part to its fragmented way of life.
For example: the difference between phones like the Galaxy S 2, which sells for £385, and the ZTE T-Mobile Vivacity, which sells for £99, is enormous considering they both hook up to the same app store. Even further down that scale is the Huawei Blaze, which goes for £60 and sports Android 2.3.
And it’s a purchase-defining difference that really splits consumers. If you want a top end phone with a Super AMOLED display – the likes of which only Samsung can provide – you’ll happily hand over a few hundred for the privilege. If you just want to get yourself on the Android ladder enough to check Facebook, you’ll probably get a budget Android handset.
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This sort of choice has opened up a distinct middle ground that’s both unprofitable and hazardous, and it’s here that companies like HTC are in danger of finding themselves stuck.
Why are mentioning HTC and not LG or Motorola? Well, HTC’s sales figures have been tumbling of late. It predicted a zero per cent sales growth for the fourth quarter of 2011, and is now in danger of having its mobiles pulled from Germany to boot. Is this mysterious Android middle ground to blame? I think so.
HTC does push out a couple of flagship mobiles per year, but 2011’s seen nothing to really rival the Galaxy S 2. Sales reflect that. The thing is, HTC also pushes out an awful lot of middling spec handsets. More than anyone else in the game.
The HTC Sensation, HTC Rhyme and HTC Explorer are three recent examples, but HTC’s known for spurting out a myriad handsets with nothing to really get excited about and no real USP to differentiate them from anything else.
The same goes for its tablets. The HTC Flyer is neither iPad-worryingly brilliant or Novo7-rivaling in terms of cheapness, so what’s the point? It’s firmly in the no-man’s-land between those devices and has sold poorly as a result.
As with most negative things written about Android, fragmentation is probably the root of the problem. It’s fragmentation of OS iterations that’s allowed manufacturers to launch budget handsets, thanks to older versions of Android requiring less in terms of raw specs.
But then, it’s not that simple and it’s not insurmountable: Samsung’s been in the same game and has done fine, because it’s been brave and aimed for the top. It’s about adapting and adopting a decent business strategy.
HTC is now pumping a lot of money into services and unique features. It’s championing both Beats technology and OnLive as game-changers, but I feel that by going slightly left-field it’s missing the obvious: people want extreme cheapness or extreme goodness.
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The Galaxy S 2 is still selling well because it’s generously stocked with spec and, as mentioned, has a better screen than most other phones on sale at the moment. It’s also pretty minimalist in design, whereas (and this is a personal preference thing) I’ve never really understood HTC’s obsession with weird metallic patterns.
I don’t think that consumers, at a basic, general level, really care too much about a mad slew of unusual features. They care about one of two things depending on their priorities: either having a phone that works on the cheap, or a stylish phone with a set of innards that aren’t going to go out of date, along with at least one easily identifiable feature that they can say is a world first. And no, Beats audio doesn’t count… Because it’s just a software equalizer.
Either way, and no matter what happens to HTC in the long run, the way Android as a platform is continuing to change is incredibly interesting. In the best case scenario, the deadly middle ground become such a danger to manufacturers that it’ll empty out, enforcing either a higher sense of quality or an extreme saving in every handset made.
In the worst case, it’ll wreak havoc with any manufacturer that doesn’t react and evolve its offerings quickly enough. So what’s it to be, HTC; budget or high-end?
