I was reminded of the challenges faced by Android Smartphone manufacturers firstly by Mr. Grubers post, highlighting how quickly HTC’s fortunes have changed this year ( see http://daringfireball.net/linked/2011/11/25/htc ) and then by this article in The Guardian talking about the same thing ( http://www.guardian.co.uk/technology/2011/nov/28/htc-smartphone-sales-halt-germany?newsfeed=true ).
The Guardian notes “
An HTC handset is just another Android handset in a sea of Android handsets. In the absence of any major differentiation in software (HTC Sense is useful and well executed, but I would argue it isn’t a major differentiator to the average user) or hardware (almost impossible when parts are bought ‘off-the’shelf’ and are available to competitors) or services (Apple has a differentiated service eco-system, as does Amazon, as does Google, but Google’s is shared by many Android licensees) the only differentiator is to be the cheapest or have the newest handset on the market.
Being cheapest is difficult, and even companies that start there will tend to move-away as pressure mounts to increase profits.
Having the newest handset on the market seems to be the main differentiator, and this is driving Android handset manufacturers to launch new handsets every few weeks so they get the publicity of being ‘new’. But that means that Android handset manufacturers success rests entirely on their next handset launch, which is probably only a few weeks after the last launch. A bad product launch can change the companies fortunes entirely.
That’s the tightrope on which Android licensees are living. Its a problem for any company that bases it’s business on the products or services of another company, and it doesn’t seem an entirely comfortable position to maintain.