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Every few months I hear rumors with these two words: HTC and tablet. On Tuesday, I heard them again with a source telling Phone Arena that HTC is expected to debut a pair of new tablets by year’s end. One is allegedly a 7-inch tablet while the other is expected to be a 12-inch device. A tablet isn’t what HTC needs to turn around its sales and profits problems.
HTC’s prior tablets and the market for Windows RT
HTC did create a 7-inch Intel(s intc) Atom-powered tablet in 2007 called the HTC Shift. It had a hardware keyboard and ran Windows,(s msft) but like many other UMPC models from that time, it was never a hit. The company doesn’t have expertise with Intel chips and the full version of Windows, however. A few Android tablets from HTC — the Flyer and the Jetstream — came and went without fanfare as well. Given HTC’s experience with ARM-powered(s armh) chips in smartphones, it would likely build new tablets with similar silicon. That would mean both would run Windows RT and not the full Windows 8 software.
Unfortunately, I’m not yet convinced there’s a market for Windows RT devices. I fully understand that some readers may have purchased one and are quite happy with it. However, there’s no data to support that Windows RT is a success by any measure: Microsoft hasn’t yet broken out Windows RT license sales from Windows 8 sales.
And after spending time with Surface RT and other Windows RT slates, I haven’t been able to recommend them to anyone. It’s not because they’re bad products; I actually like the user interface and the hardware of the various models. But at a similar price point, it may make more sense to buy an Intel Atom slate that provides similar battery life and performance to RT tablets but also adds support for legacy Windows software.
HTC’s current issues stem from several problems
I can understand why HTC might want to expand its product line to include Windows tablets: The company’s smartphone sales have been falling and so too are HTC’s revenues and profits. Instead of leading the pack with Android(S goog) phones like it used to, HTC is losing out to Samsung. So too are other companies that used be smartphone stars; HTC isn’t unique. As a result, HTC reported just $2.88 million profit on $1.45 billion in revenues last quarter and unless it can quickly reverse its fortunes with the new HTC One, it could see profits dip into losses.
We’ve previously discussed why HTC is in its current predicament. Stronger competition is one part of it. The relative lack of brand awareness and marketing is another big reason. And a lack of focus — too many different permutations and combinations of similar products — haven’t helped either. And therein lies the rub: all three of these issues would only be magnified in the market for Windows tablets.
Losing focus isn’t a winning strategy
A better idea for HTC might be to get its smartphone house in order. It’s definitely on the right path with the HTC One; it’s a top-notch Android smartphone. If the phone is successful, I supposed the company could re-invest profits into designing a Windows tablet or two, but it might be better to continue improving the smartphone line first.
Tablet sales are growing, even as PC sales are slowing, but the market for smartphones is still bigger than both. I’d hate to see HTC lose focus by entering an already crowded market for products that haven’t yet proven successful. It just seems like a big risk that HTC isn’t in a position to take right now.