10 years ago, they were an indispensable part of our everyday life and often seen mobile phones in the hands of our friends, colleagues, family members, etc. At the time, they held a solid market share and it never seemed that someday they would fall into oblivion.
Sure, we haven’t forgotten them, but they seem to have forgotten us. The companies that once produced the best smartphones, are slowly starting to forget us – the customers. Some of the biggest names we’re talking about here are HTC, Sony, and LG. These brands still exist today and from time to time they manage to launch a few models, but their market share is negligible and it’s only a matter of time before they completely discontinue the smartphone production.
As for Nokia, we know that, it literally destroyed itself phone business in a matter of years after forming an alliance with Microsoft in 2011, and in 2016, the brand was resurrected under the direction of a startup called HMD Global. Namely, Nokia as a Finnish company still exists and is mainly engaged in network infrastructure, but the Nokia mobile phone brand is licensed to HMD. In these five years, HMD has not managed to end a single profitable fiscal year (we are waiting for 2020 data), so we can say that it has not made the most out of the Nokia name, which in 2016 was more popular than today, at least according to Google Trends. It’s impossible to say whether HMD will succeed with the Nokia brand or not, but after five years of wandering and literally standing still, it’s hard to be optimistic but considering the latest news about a key person departing and Finnish Nokia still pushing in the consumer market with brand deals for headphones, TVs, and laptops – there is some small room for optimism.
But what about the others? HTC, Sony, and LG have slightly different stories. We could say that these three brands are slowly falling into oblivion because of the general market situation, which is now ruled by Chinese brands, of course, with the exception of Korean Samsung and American Apple.
Unlike Nokia, which made the decision to exit the market, these companies have chosen a slow and definitely painful death on the phone market. HTC, a pioneer of Android smartphones and a former market leader in the smartphone segment, started to get lost in the middle of the last decade, making, let’s be honest, strange business decisions. Top models, which do not normally make up the majority of Android device manufacturers’ revenue, began to lose ground after Samsung realized that this category of products is very important. Namely, top models are what make the brand recognizable, becoming its showcase.
Samsung’s S series began to erode HTC’s flagship delivery as it simply offered more logical solutions for roughly the same amount of money. Later, HTC literally prostituted the name of its bestseller Desire, launching dozens of cheaper devices with various additions to that name. In the eyes of many users, HTC, therefore, has lost its reputation. It later started producing top models under various new names, but they never reached the popularity of Desire. In the meantime, Google bought a part of HTC’s phone business and started producing Pixels.
Some analysts believe that Google and HTC played this game to save the company from a hostile takeover by the Chinese giants. Many will say that the Chinese supremacy is to blame for HTC’s failure, which is partly true, as production costs in mainland China are significantly lower than in Taiwan, HTC’s homeland. On the other hand, HTC also assembles its devices in mainland China, just like other manufacturers, including Apple, so the one to blame is definitely the company’s management and its bad decisions. A fun fact is that quite a few HMD folks were at HTC as well.
The story is similar for Sony. Its mobile department, however, was not bought by anyone, but the company itself integrated it into the other departments, as it was the only one operating at a loss. In this case, we can also blame the Chinese competition, because Sony with its middle and lower price range models simply couldn’t compete with them, both in the Asian and global markets. What was a bigger problem is the strange policy towards top models, i.e. devices that are a brand icon. We have witnessed how Sony has shortened their launch cycle from one year to six months for several years in a row, greatly confusing the fan base. Many users who bought the spring top model felt deprived given that a successor with better specifications had already come out in the autumn. Considering the inevitable increase in production costs, the calculation is clear. There was also a significant amount of illogical decisions that “helped” the current situation. Sales are practically non-existent, and the fan base of the brand is shrinking day by day.
LG has been investing in mid-range and lower-end devices for a long time but has also at least pursued a logical business policy toward the top models, but not after the LG G6. After that, the mobile department starts to crumble, often changing its decisions to exit or return to certain markets. Unfortunately, the latest rumor suggests that LG will soon give up the production of smartphones by shutting their phones business down or selling it.
This situation is not really surprising because, regardless of the number of devices delivered worldwide, only Apple and Samsung have been making a profit from this business, and part of the cake was recently taken from Huawei, which is now in a troubling situation because of US sanctions. Of course, the company will continue to produce smartphones, just like many other Chinese brands, given the size of the China’s market alone.
It’s difficult to predict the future, given the ongoing technology war between the US and China. We’ve all been tasting the fruits of American politics for a while now, and we’ll be tasting it even more, given the current chip shortage. What is most unfortunate, the biggest loss in the current trade war is precisely on the American side, at least if the American media is to be believed, and we have no reason to the contrary ;).
Either way, the future of the smartphone market at this point is hard to predict, but one thing is for sure. HTC, LG and Sony will have a hard time coming back, despite the situation with US sanctions on Chinese companies. We have recently seen that Xiaomi was also put on some list of “enemies”, but is not forbidden to use Google services and buy chips produced in factories that use American technology. The sanctions targeted American citizens and companies that were investing in Xiaomi, but a recent court order lifted the sanctions. That itself shouldn’t affect Xiaomi’s current third position in the market because it doesn’t need the U.S. market anyway. The “real problem” for Xiaomi on the market is BBK Electronics and its aggressive global spreading with brands like Oppo, Vivo, OnePlus and Realme.
Under such pressure from Chinese, relatively affordable, but by no means bad devices, it will be difficult for Samsung and even Apple to cope, while some other names like Sony, LG and HTC will simply disappear. I hope, Nokia isn’t among them. Huawei should not be ignored, as it plans to launch its own eco-system based on Android, but we will see how that will go. It is clear that the road to conquering a decent market share will be hard to achieve, but not impossible.
What do you think future holds for the phone market? Do you think we will see any of the old brands rise to past heights? Tell us in the comments down below. 🙂