HTC’s Rapid Fall a Cautionary Tale for Huawei, ZTE and Others

With an all-important product launch on Tuesday, Taiwanese phone maker HTC is hoping to write a new chapter in what has been a truly incredible story.

On the back of Android, the former contract manufacturer rose to become one of the world’s largest smartphone makers, earning praise for its design and ability to rapidly incorporate new technologies.

But after years of dramatic growth, the company saw its fortunes fall even faster than they rose. Last year, HTC put much of its attention on the high end of the market, where much of the industry’s focus and profits are found. In doing so, though, it ran smack dab into the marketing and manufacturing prowess of larger rivals, particularly Korea’s Samsung.

On Tuesday, the company is launching what most expect to be the company’s latest flagship model. The company itself has been giving out some hints at the product, while tech sites have posted various other rumored details and pictures of a product code-named M7.

Whether HTC can find ways to out-innovate in 2013 remains to be seen, but its story should provide a cautionary tale for other device makers that have found success at the low end and are now seeking to move higher up.

There is fierce competition at the low end, to be sure, but there are lots of niches to be found, especially in making devices customized to the needs of a particular carrier, even selling those devices under those carrier’s brand names.

It’s the part of the market that has proved lucrative for Chinese firms Huawei and ZTE. Both of those companies, though, have aimed to move upmarket, producing higher-end devices and seeking to elevate their own brands.

That’s a similar tack to the one taken by HTC — one that worked great, right up until it didn’t.

Now the company is aiming to boost its marketing efforts, but even with a louder voice, it still risks being drowned out by Apple and Samsung — both of which have a fortune to spend on ads.