HTC Windows Phone On Chopping Block?

Aug 19, 2013 (08:08 AM EDT)

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HTC's share of the Windows Phone market has plummeted to below 5%. This has led to speculation that the company might abandon the platform altogether as it attempts to turn itself around. The company said, "HTC doesn't comment on rumors or speculation," but the writing might already be on the wall.

HTC recently released the 8XT with Sprint in the U.S. The 8XT is similar in appearance to the 8X and 8S, which HTC released in late 2012. These are the only Windows Phone 8 smartphones that HTC has made since the platform debuted nine months ago. The 8XT is the only WP8 device HTC has brought to the market in 2013.

Since Windows Phone debuted in fall 2010, HTC has made just nine devices with Microsoft's platform on board. During the same time, it has made at least 35 Android devices. HTC's been developing Android-to-Windows Phones devices in an approximate 3.5-to-1 ratio for the last few years. So far, the ratio hasn't changed. HTC might have released only one WP8 device so far this year, but it has also released only three Android devices (the One, the First and the One Mini).

[ Slow updates aren't helping Windows Phone's prospects. Read Windows Phone Users Wait Impatiently For Updates. ]

HTC clearly is prioritizing Android. Given Android's 79% grip on the global smartphone market, HTC would be stupid to allocate its resources otherwise.

Let's look at Samsung. Samsung has released 14 Android phones and two Windows Phones in the last nine months. Its ratio is 7 to 1. Samsung knows what its money maker is. Dell and LG, two other companies that supported Windows Phone at the beginning, have long since lost interest in the platform.

As far as Windows Phone goes, Nokia is HTC's only real competitor -- but it's a big one. Nokia's Lumia-branded smartphones now account for about 80% of all Windows Phone 8 sales. Nokia has picked up the pace of innovation, and is bringing new and appealing devices to market at a faster rate. The Lumia 1020, for example, has a 41-megapixel PureView camera. The Lumia 925 has a brand new aluminum design and thinner and lighter body. Nokia is also going overboard with customized applications and software for its smartphones. Nokia isn't just focusing on the high end. It has an entire range of Windows Phones now that span from entry level to flagship. The Lumia 520, Nokia's least-expensive smartphone, is one of Windows Phone 8's best-selling handsets. In other words, Nokia is doing its best to win market share.

HTC, in contrast, is not. The 8XT brought to market this year is a recycled effort that merges the features of two previous designs. Aside from HTC's BoomSound stereo speakers, it doesn't offer anything new or inventive. The 8XT certainly does not offer the high-end appeal that oozes from the HTC One, its flagship Android smartphone, but it's not a low-end device either.

Despite HTC's lack of recent investment in Windows Phone, its historic support for Microsoft's smartphone platforms is well documented. HTC has been building devices with Microsoft's OS on board for more than 10 years. It was a big supporter of Windows Mobile 5 and 6, and offered great devices such as the Touch, Touch Diamond and HD2.

The other important aspect to this story is HTC's financial status. The company has lost share in the Android market, too, and is feeling the pressure from Samsung, LG and others. The company recently reported its first-ever quarterly loss and its resources have been constrained thanks to higher-than-anticipated costs.

HTC might not be "exploring strategic alternatives" yet, but surely there's some soul-searching going on in Taipei.