HTC Plans Comeback with Focus on Quality

HTC characterizes its poor fourth quarter earnings and disappointing first quarter projections as an inevitable part of the product launch cycle, and insists that the company will regain traction in the market as it unveils new smartphones and streamlines its offerings to focus more on quality. Profits were down 26 percent.

HTC's plan for growth hinges primarily on the Android OS. HTC will introduce an updated version of its Sensation phone running on Ice Cream Sandwich in March, which places the handset in direct competition with Samsung's Galaxy, previously the only handset using ICS.

HTC is also attempting to broaden beyond the consumer market and make inroads into enterprise, following the path of rivals such as Apple. The company teamed up with IBM to promote IBM's business apps for Android.

The IBM apps aimed for enhanced security for the Android platform, as businesses voice concerns over Android's safety as an open-software platform. Android's marketplace has often had problems with malware, compromising the platform's security.

Despite HTC and IBM's campaign to convince businesses of Android's security, HTC announced a security leak on its Android phones likely to further damage the OS's reputation as a secure platform. The bug leaves customers vulnerable to personal data hacking.

The company is hurrying to fix the issue, but the security snafu will likely diminish confidence in Android and lead users to choose Apple's iOS, renowned for its security.

HTC faces stiff competition for Android fans from Samsung, whose Galaxy products command a large share of the market, going toe-to-toe with Apple. Samsung now dominates Android device sales and will be difficult to slow, especially as it gears up to release its latest S3 model this May.

To ease its dependency on Android's OS, HTC is diversifying its phone offerings and moving towards Windows OS. The first phone HTC released this year, the Titan 2, runs on Windows 7.5, and the company expects to introduce more Windows-based handsets once Windows 8 launches.

HTC's diminished finances point to a need for change within the company beyond simply introducing new products. HTC is shrewd to diversify into Windows, but the public's reception of the OS has been slow so far. In addition to diversifying, HTC is also fortifying its Android presence with the forthcoming ICS update, which will bolster competition with Samsung. But the market is fast-paced, and HTC faces the challenge of narrowing gaps quickly or else risk falling behind even further.