How the internet of things could bring levity to HTC

Unlike LG, Samsung or Motorola, HTC did not have much of a handset legacy before the smartphone. Indeed, some of the company’s notable early projects — including the Compaq iPaq PDA and T-Mobile G1 — set the stage for operating systems that would battle on the global smartphone stage. In turn, despite its proclivity to offer its own software spin on top of their user interfaces, HTC stood on the shoulders of billions of dollars of investment that Microsoft and Google poured into their ecosystems.

The tradeoff worked well for many years as HTC rode Android’s rising tide. But then the downsides surfaced.

On Android, Samsung in particular was able to far outspend it in terms of marketing and flood the market with smartphones at nearly every price point. On Windows, HTC had to deal with a new reality of little leeway in terms of user interface customization and market share struggles related to an immature app library. And of course, no matter which horse it rode, it was racing against Apple and unable to share in its success.

But last year’s release of the seemingly innocuous Re camera signaled a new direction for the company that evolved from a maker of smart mobile devices for others to the creator of flagship devices such as the HTC One. The product was, of course, not a phone, it did not run Android, and it was compatible with the iPhone. In the world of the internet of things, virtually anything that is not a connected control point such as a smartphone or tablet will be accessible via one; the Re was such a product.


Now there are reports that the company’s long-rumored entry into the smartwatch space will forego the only major licensable platform available– Android Wear — and that HTC will go its own way, again supporting the iPhone and following in the footsteps of Pebble and other free-thinkers. In some ways, a smartwatch plays better to HTC’s strengths in both hardware and software design without having to take on the developer support of a whole platform. It’s also not a surprising move given the failure of Android Wear to wow consumers last holiday season and Google’s decision to allow limited customization of the interface, an HTC specialty.

The move comes with greater risk, though. While virtually everyone is undercutting the Apple Watch in terms of price, it will be difficult to fight for mindshare against the wristwear from the platform incumbents or their sanctioned partner. Samsung, its dominant rival in the smartphone space, has made limited inroads with smartphones using its own platform.

Furthermore, another challenge that HTC will face as it diversifies from the smartphone market is distribution. This is particularly in the U.S. where carrier stores dominant smartphone distribution. The company will need to expand its brand in new categories in new channels. Still, casting its boat off into what could be a rising tide is a better alternative than trying to fight the wave of momentum that competitors have.

Even if HTC is successful, positioning at the forefront of an era of connected smart purpose-filled objects won’t necessarily free it from the binds of ecosystems. Both Apple and Google are eager to launch hubs that will allow consumers to control all of their associated devices from a single point that they control. However, unlike with smartphones, it can provide compatibility with both major operating systems and even hedge its bets on others. That’s a level of freedom that the company did not enjoy as just a smartphone maker.