Monday 8 July 2013

Fun Topic: Focus on 'other' Androids? (aka HTC and Samsung results dissapoint)



I usually steer clear of topics that are on relevant for a short period of time or based on near-term predictions or forecasts. They have this 'nasty' habit of making people look silly. However the latest reports of earning for HTC and Samsung have sent shock-waves through their respective stocks and at least for 'me', made me re-think a few things...

 See Mashable's article here:
http://mashable.com/2013/07/05/samsung-htc-earnings-analysis/

 Basically the 'softening' that happened earlier for Apple stock seems to have trickled down to Samsung and HTC. For the record, Samsung is still 'growing' as it's profits jumped 47-50%, but that still wasn't as much as analyst wanted. HTC on the other-hand had a 83% drop in profit when compared to last year. (For Samsung, I find it rather incredible that 47% growth wasn't enough for "analysts". Maybe we need to pair JAY-Z with someone else... j/k)

 *IF* I had to guess what happened here are 3 possibly 'theories' I have:
#1 - HTC First and it's joint venture with Facebook has gone south. It's HTC ONE was delayed a very critical few months earlier this year. This basically forced possible consumers to other platforms, most likely the Samsung Galaxy S4.  (Also shows you pure specs isn't enough. HTC J Butterfly had FullHD 1080P first, basically a 5" HTC ONE, but it's didn't dominate either...)
The HTC ONE "mini" or however they will name it is coming soon. If it comes up before the S4 Mini, maybe they can re-gain some traction. Ironically I actually like the HTC ONE. For example, a recent Twitter @Wayne_Pau convo of mine:
@Sarah_Sugoi @ericylai Have a HTC ONE tester. FullHD + cam = stunning. Beats is great. 32GB + SD = lots of space. Bigger though.
 #2 - Samsung S4 was 'OK'. If I *had* to choose, I would say HTC ONE was nicer than S4. I also felt that the S3 was only marginally different in many ways from S3. Note 2 is a much more radical device with Stylus/S-Pen, etc. I'm not entirely sure I'd be motivated as a user to upgrade from the S3 to S4 if I already had it.
  #3 - I believe we are seeing for Android devices what Apple saw a few months ago. I agree with Mashable article theory that everyone who wants a $600-800 Android Superphone may already (or nearly everyone) have one. 

The last point I believe is the most important. According to a few articles which cite IDC sources that HTC is actually *behind* Chinese Android Makers ZTE and Huawei in recent Android sales:
"The fact that Huawei and ZTE now find themselves among the Top 5 smartphone vendors marks a significant shift for the global market," said IDC research manager Ramon Llamas. "Both companies have grown volumes by focusing on the mass market, but in recent quarters they have turned their attention toward higher-end devices. In addition, both companies have pushed the envelope in terms of industrial design with larger displays and smaller form factors, as well as innovative applications and experiences."
(http://www.theverge.com/2013/1/25/3914390/idc-smartphone-report-apple-samsung-huawei-zte-in-top-five)
Smaller form factor and mass market (aka cheaper phones). I've had huge issues trying to get <4.7" Android phones locally in Canada for test devices.

 More simliar info here:
http://www.livemint.com/Companies/t5kHWfpIZTPxsv4BhFSApI/HTC-earnings-miss-estimates.html
http://www.washingtonpost.com/business/economy/digest-samsung-htc-fall-short-of-forecasts/2013/07/05/a5a82d68-e291-11e2-aef3-339619eab080_story.html
In the spirit of full disclosure, Samsung is of course Korean (South) but HTC is technically Chinese, but not People's Republic China, rather the Republic of China aka Taiwan. 

 For a while it seemed like it was going to be just Apple and Samsung and using the Apple model that meant focusing on faster and better devices as users obsolete devices quickly. Now I'm not so sure. *Maybe* the growth will soon be at the lower-end of the spectrum. I took out a iPhone 3Gs the other to test with. I was *shocked* show poor and small the display looked (next to HTC ONE, iPhone5 etc). 

 Longer term, I think we may be seeing a trend towards growth in Android, but at the Feature-Phone (aka "Dummy Phone") end of the spectrum. This would be the $200-$300 handsets. The 'free with contract' type of devices with smaller screens and less frills. That means designing for less DPI, smaller screen and slower processors (opposite of the current trend bigger, faster, better looking devices being the 'norm' like Note2, S4 and ONE..). 

 Thoughts? In the market for a new Android? Is it a HTC or Samsung? Or Other?

 Hope that helps...

 Wayne Pau.

p.s. More links on the HTC/Samsung fall:


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