HTC is changing for the better: Jack Yang, HTC South Asia chief

HTC has not been in news for all the right reasons lately. The company’s stock has been in a free fall and some of its key senior executives quit on a sour note. There are reports of knives being out for its CEO, Peter Chou. Needless to say, 2013 has been a rude wake up call for the Taiwanese smartphone vendor, which was once the largest Android vendor globally and started the smartphone trend 15 years ago with its range of Windows Mobile PDA devices that were carried globally under different brand names. Today, HTC does not figure in the top five smartphone brands in the global smartphone market share. But things are changing for good, says HTC’s Jack Yang, who now heads the South Asia region for HTC. The company has roped in Robert Downey Junior on a two-year contract, with HTC spending reportedly $1 billion for the entire campaign.

“Our cards say HTC – quietly brilliant. But now we realize that we don’t need to be quiet,” Yang tells me while riding in a HTC branded limo around Delhi. The idea behind the campaign is to ensure people come to know about HTC as a brand. “We let Robert ideate and come up with the campaign,” he says. The result has been a series of adverts where people come up with phrases as obscure as “Hold The Cat” that abbreviate into HTC. Initially, the campaign didn’t make much sense initially but it grows on. HTC even launched a name generator website where people have spent hours clicking on a tab that brings up random names.

Yang was with Apple as recently as June where he headed sales for iPhone and iPad in South East Asia. It has just been about eight weeks at HTC. “I asked my engineers to convince me to shift from my iPhone to an HTC smartphone,” he tells me. HTC will soon launch a campaign in India that would make it easy for people to swap their current non-HTC smartphones. It will also educate potential buyers about how easy it is to swap their data from any other smartphone to an HTC device.

“In South Asia, India is one of the most important markets for HTC,” Yang claims. And it is now showing. “We are increasing our retail points to 7,000 and aim to be present in 150 markets in India soon. We are also increasing our after sales service centers,” Faisal Siddiqui, HTC’s India country head chimes in.

HTC has always had premium products with great design. I found the HTC One to be the closest that any smartphone has come to the iPhone. Yet, its market share in India is abysmal – just 2 percent in the last quarter according to HTC India. “They have had almost similar market share percentages in the past few quarters as well – primarily because they have a very focussed and
streamlined high-end positioning and targeting in terms of their range of devices,” says Manasi Yadav, senior market analyst – mobile phones and tablets, IDC India.

“They specifically want to move their portfolio towards the higher end of the spectrum in terms of pricing and hence have been focussing on revenues instead of the volumes,” she adds.

Yang agrees. Even though 67 percent of smartphones sold in India were in the sub-$200 segment last quarter, that’s not a segment HTC wants to play extensively. “If you look at it, there is essentially just one global brand that is really active in that segment,” he says. HTC does not want to let go of its premium image. The phones have to feel great at any price point. This is not very different from Apple’s playbook – leave the mass market alone and dominate the high-end, high margin segment. The question is whether HTC can pull it off.

Things were looking great for HTC at the beginning of the year. Its flagship One smartphone was looking like a winner with top-of-the-line specifications, premium design and more importantly, it was scheduled to launch before Samsung’s flagship Galaxy S4. The last bit was critical as Samsung would have bulldozed its way with its almost bottomless marketing budgets and quick global roll out. It seemed Chou & Co had everything under control.

But catastrophe struck. After announcing the One with broad launch timelines, HTC had to delay the launch. The One used a custom camera module that was one of the headline features of the phone. Called UltraPixel, it had a larger sensor that HTC claimed would give better quality photos under any lighting condition. Unfortunately, the camera module suffered production delays that meant HTC had to delay the launch of the phone. While HTC scrambled to get the One out of factories, Samsung not only launched the Galaxy S4 but also made it available in over 100 countries by the time HTC could launch the One. The market was lost.

“The One was a learning experience for HTC. We have learnt a lot from it. A lot of changes have happened internally, the processes…” Yang is candid enough. “I have seen our 2014 product portfolio and it looks promising,” he adds.

Ask him about HTC’s reaction to Nokia’s acquisition by Microsoft and Yang recites the official line. “We have been working with Microsoft for a long time. As it stands today, nothing has changed and we are still partners,” he says. “But if you see our product portfolio, most of it is on Android,” he adds.

Despite all the gloomy reports about HTC’s future prospects, it is clear the company is trying hard. Marketing and product management had always been pointed out as HTC’s weak points but it is working towards fixing it. But what it needs the most right now is a stroke of luck and a runaway hit.