HTC creates Studio group directly under CEO to drive new device strategy. Hints move away from Qualcomm

In addition to revealing all the troubles with crashing sales, slashed R&D costs and the new secrecy on shipment volumes, HTC’s Q4 earnings report had some bright spots in it.

The biggest one – management seems to understand they screwed up, admits it and is already taking action. They also hinted about two very interesting initiatives underway, that should result in much more competitive products sometime later this year.

One of them is creation of a new Studio – a group or department –  within HTC. It is tasked specifically with formulating and driving the new product strategy inside the company. The new Studio department is a “cross disciplinary group” comprised from engineering, designer and other teams, and reports directly to CEO Peter Chou.

Here’s HTC CFO Winston Yung talking about the new Studio during the earnings conference call:

“When we look back to the 4th quarter of last year, we simply dropped the ball on products. If we compare some of the products that we have launched,  (especially in the U.S., LTE products) with some of our competitors products, you’ll see thicker form factor for example. And LTE at this point also has some compromises, like battery life. So we simply need to do a better job on both the design, and also the internals and the components of products. And these are the various areas where we will be working on. From the design point of view, from the choice of components, having a lot more open mind as to what components we use, and using the most appropriate components for the phone. By having a more focused approach to our product strategy, and having the organization behind the product strategy to support it. I think I have told some people when talked about the creation of this Studio, which is a department within HTC that reports directly to Peter (Chou, HTC CEO). And this group of people comprise the team from design, the team from engineering and etc; working on a cross disciplinary approach, and reporting directly to Peter. It has a lot of focus, is spending a lot of time on the key products that we are going to launch this year. And I think from these various perspectives, organization more focused on strategy and having a more open mind on components, choosing the best components, will allow us to regain the edge in products. “

Another interesting development, stemming from HTC’s Q4 implosion, is clear signaling that they are now finally ready to move away from Qualcomm CPUs, for some of the products at least. Here’s what HTC CFO had to say about it:

“ … for most components there are multiple sources. And we actually want to and make sure that we do have multiple sources for a single component. So we have, I think, a very good range of suppliers to choose from on CPU, for example, or memory, for example. And I don’t think we are constrained in any way from a component point of view…”

This quote comes in the context of HTC’s newly found “open-mindedness” towards the components that go into the smartphone, which company execs couldn’t have mentioned more often then they did during the CC. As well as their desire to use the “best components“, and some veiled hints that some of the things they used last year, were at least partly to blame for the underperformance of Sensation flagship.

The only components that HTC was really stubborn about since very beginning, were Qualcomm chipsets, that went into almost every HTC device. Which makes it hard to interpret the above as not a snub at Qualcomm, and confirmation that HTC is now working with Nvidia or Texas Instruments to power the next flagship.

 

Author: Stasys Bielinis

While I like to play with the latest gadgets, I am even more interested in broad technology trends. With mobile now taking over the world - following the latest technology news, looking for insights, sharing and discussing them with passionate audience - it's hard to imagine a better place for me to be. You can find me on Twitter as @UVStaska'

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  • http://twitter.com/abouillot Alexandre Bouillot

    Other name as platform provider could be ST-Ericsson, as they already shipped a high end device together in the past (HTC Sensation Z710t)

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  • http://twitter.com/WaltFrench Walt French

    How important do you think the “snub” of Qualcomm will be, if it (continues to?) provide a competitive CPU and support package? 

    Maybe, I’m asking: is the ARM CPU business so cutthroat that nVidia or TI will come in with a lowball bid to try to win some business? Has HTC outsourced its CPU design and/or supporting design to a complacent Qualcomm in a way that made HTC uncompetitive? Doesn’t a CPU supplier end up getting integrated into the design team in a way that is difficult to simply bid out?

    I can see some teasers in the announcement that suggests HTC has some re-thinking to do in the area, but given that CPU is a relatively obscure feature of a phone, and a not-too-expensive one at that (behind screen & memory, maybe battery), it sounds like this is more a signal of newfound aggressiveness by HTC, rather than an impending supplier change. Can you amplify?

  • http://www.staska.net Staska

    To tell the truth – nobody really knows except for HTC, Qualcomm and other suppliers to whom HTC (probably) is talking. All we can do from the outside is read the tea leaves of their public utterances. Which is what I did in this post :) 

    But this emphasis on “open mindedness” and that they are working on changing the components inside its phones – sounded really new/different from HTC’s earlier public announcements. They also sounded unhappy about how Sensation turned out/performed.  

    The only exclusive supplier in HTC phones that comes to was Qualcomm. So I think it is highly probably it’s them that HTC had in mind. 

    I don’t think the price of the chipsets would be a major consideration if HTC decides to switch chipset suppliers. This would be more of a sign that competitors have something better performance wise.  

    HTC’s Sensation’s main competitor – Samsung Galaxy S2 – performed way better with Samsung’s CPU/GPU combination. Maybe it was HTC Sense fault. But it sounds that HTC thinks it had more to do with chip performance. 

    I don’t think that HTC is moving totally away from Qualcomm. But openly ending the semi exclusivity they had will be a significant development.