Pledging to deliver three Android smartphones this year, phone maker HTC may be poised to continue leading the pack in getting devices sporting the Google-backed OS out of the gate.
But that strategy alone might not be enough to keep the Taiwan-based company on top in the open source mobile market.
According to HTC CEO Peter Chou, the smartphone manufacturer plans to release at least three Android devices in 2009, a figure that includes the already much-anticipated Magic model coming in April for European carrier Vodafone. HTC also served as the manufacturer for the T-Mobile G1, which debuted to much fanfare last September.
At the same time HTC is gearing up for a series of new Android-based releases, the industry is also eagerly awaiting the introduction of Android models from other manufacturers, including Samsung, Sony Ericsson and other members of the Open Handset Alliance, which officially oversees Android development.
While HTC may be building a dominant lead by being the first to capitalize on Android, its position could become vulnerable if its upcoming devices lack a “wow” factor, said Avi Greengart, research director for consumer devices at Current Analysis.
“There’s no question that HTC has the lead, coming out with the second Android handset, Magic, before anyone else has their first and saying more are on the way,” Greengart said. “At the same time, the real question is: At what point will someone come out with a differentiated Android handset?”
HTC needs to go beyond the bare specs of an Android-compatible system, he said.
“Right now, it looks like HTC took what Google gave them and put it on hardware,” he said. “There’s nothing wrong with that, but the promise of Android is based on open source — being able to modify it in some way and create products with a user interface or features that make them truly stand out, and we haven’t seen that from HTC yet.”
Greengart also said that despite HTC’s lack of innovation to date, they do still maintain a competitive advantage by being the first to roll out products.
“So, does the plain vanilla still mean they have an edge? Probably because it’s easier to just keep improving on what you’ve got,” said Greengart. “At the same time, where it gets really interesting is the second half of this year when we start to see a wider range of devices coming out. Some of the manufacturers have not said publicly, but have said privately, that they are focusing on social networking and other types of mobile applications that may really set them apart from the competition.”
Meanwhile, the growing popularity of smartphones continue to boost mobile Internet use, which is having a widespread impact on the mobile industry in terms of advertising, service offerings and sales. Despite projected dips in sales growth, the overall smartphone market is still in the black, and Juniper Research predicts that smartphones will account for 23 percent of all new mobile phones by 2013 as demand continues for devices that can run complex applications beyond simple phone calls.
As a result, mobile phone plan providers are scrambling to transition from subscriber minute plans to Internet data plans to remain competitive and advertisers are clamoring to capitalize on the nascent mobile Internet market.