For most of this decade HTC has built other companies’ phones and let them put their own names on the result, and in Barcelona this month it has been behaving like a company that intends to stop.
The old arrangement was extremely comfortable and extremely limiting. HTC designed and manufactured, an operator or a brand badged the device, and the customer bought an Orange or an O2 or a Qtek without ever knowing who made it. That is a good business with reliable margins and no marketing costs. It also means that every ounce of goodwill a well-received product generates accrues to somebody else, and when the operator switches supplier you have nothing.
Putting its own name on the hardware is the correct decision and it is going to be harder than HTC expects, because the company has no consumer brand at all. Nokia has spent thirty years building one. Motorola has the Razr. HTC has a reputation among people who read specification sheets, which is a real asset and a very small audience.
Windows Mobile 6 was the other announcement here and it is a tidier release than the version number suggests, mostly because it is not trying to be a new thing. Better Exchange handling, HTML mail that renders something close to what was sent, a cleaner set of defaults. All welcome, all incremental, none of it addressing the actual problem, which is that this operating system was designed around a stylus and a nested menu tree and no amount of polish changes that architecture.
I wrote in December that nobody had rethought the interface. Two months later, at the largest mobile event of the year, still nobody has. The most capable devices in this hall are all navigated the same way they were three years ago, and the company that has actually proposed an alternative is not exhibiting here and does not ship until June.
HTC’s real exposure is that it does not control the software on the products it is now attaching its name to. Every complaint a customer has about a Windows Mobile device is a complaint about something Microsoft decided, and the badge on the front now says HTC. That was a sensible trade when the badge said Orange. It is a much worse one when you are building a brand, because you inherit the blame without the ability to fix the cause.
The way out is to build a layer of its own on top, which several manufacturers have tried and none have done well, because writing good interface software is a different discipline from building good hardware and very few companies have both. HTC has the second in abundance. I have seen no evidence yet of the first.
What I would watch over the next year is whether HTC ships something where the software is visibly its own work rather than Microsoft’s with a theme applied. That is the test of whether this is a real strategic shift or a change of sticker.