No mention of Apple's successful legal attack on HTC over garbage patents like slide-to-unlock. Apple was able to block imports of HTC phones in 2012 back when they had the hot Evo brand and were introducing the One brand. HTC settled for an undisclosed amount that HTC has to pay Apple for every unit it sells. They have not been able to regain momentum since.

Do bear in mind that not all patent claims in Apple vs. HTC were what you describe as 'garbage'. Things like http://www.google.com/patents/US5848105?dq=5,848,105

I guess it's not mentioned because it's irrelevant? The people on HN seem to care a lot about lawsuits and companies copying eachothers features, but most people buying smartphones couldn't care less. People don't care who invented something first or who sues who, people just pick whatever seems to be the best product that they can afford.

I don't think that HTC failed because of a lawsuit; Samsung was pretty successful despite all the lawsuits, and Apple is similarly killing it despite constantly being sued from all kinds of companies.

How is having to pay another company a margin of what you make on every unit not relevant? I doubt it's going to be small sum.

It might not be relevant to the end users but it's very relevant in a discussion of HTC's finances.

As Android soars to over 80% market share cheaper Chinese and Indian brands are dominating the market similar to OEM PC market. Vivo, ZTE, Alcatel, Coolpad, Lenovo, Huawei are a leader kicking Sony, LG, HTC out the market as they did with BlackBerry, Motorola, Nokia.[1]

Android One will set the bar even lower. Soon a phablet with 5/6" screen, 4GB memory, a quad core CPU and over 16GB storage with Android One may kill all Android Flagships if Google update promise work fine.

Smartphone conversion is topping and market is saturating. Market is reif for a new killer gadget but I don't think it is a watch.

[1] http://communities-dominate.blogs.com/brands/2015/08/smartph...

I would love a gadget that doesn't require my eyes.

If I get a whatsapp message, why should I have to look at the screen to see what it says?

Looks like this is pretty cool: https://play.google.com/store/apps/details?id=com.RSen.Comma...

But Siri can't do it.

I'd prefer my eyes over my ears and voice. Just imagine a train car full of people talking to their phones.

Have you ever watched (heard) someone talking with the mic held between their lips/teeth - you can be a couple feet away from them and not hear them over the sound of the train/bus. It's actually pretty awesome.

Which is really annoying for the people sitting adjacent or across from them. Add more people speaking into their phones and the noise volume tends to go up.

No, I don't think voice is a good choice either. But ears - I wear headphones all day already.

Moto Hint?

And just lack the PCs full of firmware crap, but this one is not removable.

Old vendor OS (Symbian, J2ME, ....) also had it, but not on Android scale.

>>Market is reif [sic] for a new killer gadget

Is it? How can you tell?

They made some bad technology bets. They bet that a low light camera sensor (ie low megapixel, it has 4 MP) would do better in the market than the high megapixel camera .... big, big mistake. Whatever the gain in low light, consumers want a high resolution photo they can crop.

A couple of years ago I met the guy who owns the company that manufacturers the phone lenses. A real genius. As he passionately talked about optics I was busy thinking to myself "your profits are doomed and you dont know it"

I own an htc one. HTC has made many mistakes, the camera was not one of them. All photographers know that the amount megapixels do not correlate with a good picture.

In fact back when the HTC one was first released ,reviewers hailed it as the best phones in the market.

But most consumers aren't photographers. They've been led to believe after many years of intensive marketing that megapixels are the only metric for a "good camera" on a phone.

While I agree that the megapixel count is pretty irrelevant. I'd say that the biggest advantage Apple have camera wise is a really good, really fast image processing pipeline.

The absolute best feature in a mobile camera is the time-to-capture. The faster it is, the faster you get the shot you want.

I'd also argue that the iPhone 5 default camera app/calibration/settings just produced better shots, faster, than the HTC One default camera.

This is absolutely true. Apple devices take the picture when you press the button. When you press the capture button an an Android device, it sits around for a random delay between half a second and five seconds, maybe takes some time to focus, and finally captures the image. By which time the shot you set up is most likely over. And you can't learn the delay and anticipate the timing, because it's not even consistent - it's random.

If anyone knows of an Android device that even comes close to the responsiveness of an Apple device, I'd love to know about it.

My Xiaomi Mi 4i on normal mode snaps the shot when you touch the button.

I discovered this accidentally by taking a series of 12 shots, expecting the normal Android screen freeze and thinking "damn, the camera app is broken", then noticing that the "gallery" kept changing slightly.

This is a lot of fun with Google Photos as once the photos auto-upload, Google will usually stitch them together into a sort of gif (could be a gif for all I know, I never checked the file type). So you can still have a "movie" even in occasions where you don't have time to get the camera out and switch it to movie mode.

> biggest advantage Apple have camera wise is a really good, really fast image processing pipeline

And software to process it. Google announced Camera2 API only on IO2014 which would dramatically improve the postprocessing, but so far it hasn't been implemented much across vendors, who had their own technology already for years. They didn't even update their own Google Camera to include, which speaks enough about seriousness of Google caring about Android for consumers.

Dearest Nostradamus, tell us all what other companies are doomed by their optics decisions.

Ah, yes the owner is so doomed... https://www.google.com/finance?cid=683440 Largen is worth 15bn usd

I don't care much about ridiculous amounts of pixels. 4 MP is fine for me. My problem with my HTC One was that the microphone didn't work properly during a call, and after several attempts, it clearly couldn't be fixed.

I've got a Samsung Galaxy now. It sucks in different ways.

I wish someone would make an actual good phone. I find myself pining for my old Motorola Milestone, despite its stupidly locked bootloader.

How do I get me some HTC stock? I never purchased international stock before, but if it's really trading for below cash, it might be a good buy. Something to research tomorrow.

Look up HTCCY. Large international companies can be traded in the US via ADRs.

Where do I sign up for that deal where they pay me to take their stock?

tl;dr: "HTC Is Now Essentially Worthless". That's it.

This article is devoid of any content past the headline. TechCrunch is becoming worse than BuzzFeed.

> The profit on an average Android phone is about a penny.

You what now? How? Is that wholesale - but even so...

this is fairly shocking news, but with margins like that we are just expecting manufacturers to run at a loss whilst funding from other revenue (Samsung presumably makes money from consumer electronics elsewhere)

Samsung is different than the average device: they actually have a profit margin. It is essentially Apple vs. Samsung, with the latter propped up by subsidized software from Google as part of a transparent proxy war, in a battle for the smartphone market... no one else matters.

http://www.bloomberg.com/bw/articles/2013-05-16/google-makes...

I would contend that Xiaomi could upend Samsung in China, arguably the most important market in the world.

But other than that, I 100% agree with you.

Also in India, not the biggest market, but reasonably big and growing.

Profit or marginal profit?

If the former, then expecting manufacturers to run a loss would be silly - we just said they're running a profit.

If it's marginal profit, then it depends on what their fixed cost was and how many units were produced...

And if it's absolute profit, then the company is still worth running - you're making enough money to pay your suppliers, your employees, and CEO's still getting their salary and bonuses. Hundreds people directly paid by the company are better off with the company still standing than closed. Thousands of customers are better off being able to exchange their currency for your product. (else they wouldn't do it.)

The only people suffering are shareholders, and you wouldn't do them any good by shuttering the company, because if you stay open there's still chance the company will make the profit in the future.

You're neglecting opportunity cost in your analysis. Otherwise, I more or less agree.

You assume there are other more profitable ventures out there. It appears, from the actions of investors and central banks, concerns that provide a return where you'd worry about the opportunity cost of not investing in them are few.

See: Europe stagnation, U.S. Fed holding interest rates down, negative interest rates, Japan, Brazil, and now China's massive slowdown.

You seem to have misread my comment.

The comment by meric above seemed to be making a claim ("If there's positive (accounting) profit, it's worth doing!") about the general case, in which case opportunity cost is an important element.

If the claim was meant to be narrowly about this particular situation, then I still think a note that opportunity cost is likely to be low is an important piece of the analysis.

I never said (and did not mean to imply, and don't think I did) that including it would change the conclusion - just that omitting it left the argument incomplete.

"The profit on an average Android phone is about a penny."

That sounds pretty unlikely to me. Is there anywhere this is demonstrated in more detail?

Eh maybe somebody can explain for me. This is surely just some aberration of using enterprise value as a metric for company health, while ignoring other important metrics, right?

Like the 'value' of the company, as described here, is partially based on market sentiment, but doesn't mean that the company is necessarily any less profitable or healthy than last year...? Surely many companies go in and out of having "zero value" just as a matter of course, in that case, given that shareprices could go down for reasons other than a decline in net profit, and cash assets could go down for reasons other than ill-health.

I wonder what this means for the Vive.

Very surprised to see no other comments related to Vive. Search and you'll find rave reviews of the Vive, which apparently launches this Christmas, and made the incredible decision to natively support full-room (15x15 feet) virtual reality. I can't find a bad review for this thing.

Valve probably negotiated one heck of a deal, but fact remains that HTC finds themselves in an existential strategic partnership with one of the strongest, most capable high-tech companies in the world. Valve is surely committed to the Vive and HTC couldn't dream of a better partner. This matters more than you'd think from the coverage of HTC's troubles.

I hope they don't scrap it - or maybe spin it off or something.

As someone still using an HTC One M7 and loves it, I don't think HTC's heart is in it anymore. The M9 was a retread of the M8, which itself was just a "refinement" of the M7. And somehow, despite two generations of refinement, the camera is still mediocre.[0] To boot, the HTC-built Nexus 9 got disappointing reviews, mostly due to build quality.

I wouldn't be surprised if they get out of the smartphone business altogether in the next few years to focus on stuff like the Vive or the RE camera.

[0]http://www.forbes.com/sites/ianmorris/2015/05/25/htc-one-m9-...

I can still remember a time when an HTC PDA was literally the hottest tech on the market. How fascinating it is to see how much has changed in less than a decade.

Their continuous broken promises to provide upgrades, only to dismiss them at the very last minute is what happened.

On my case the way they handled the HTC Desire upgrade to 2.3 did it for me.

Yep. My first "proper" smartphone was a Palm Treo (made by HTC) and after that I had a couple of HTC phones running Windows Mobile back when your options were generally PalmOS, Windows Mobile, and Blackberry.

Those things completely suckered me in and won me over when I found out I could stream Shoutcast stations in the car via my phone or download and install 3rd party apps or turn my phone into a turn-by-turn GPS navigator. It was like I had all the phone/calendar/email stuff plus a TomTom and an XM Radio without any additional subscriptions to pay for.

For all of their flaws (and there were plenty), HTC really was making some of the most capable smartphones on the market. Outside of some high-end, several thousand dollar micro-portable PC, it was the closes thing I had seen to having a full computer in my pocket.

But then the iPhone came out and despite lacking so many of the "smart" features in its debut version, it was oh so much more appealing to the non-techie, consumer market and the rest is history.

HTC never really seemed to come near being an industry leader ever since. They've at best kept up with Samsung and Apple and Moto and LG, etc. but they've never really bested any of them in an undeniable way. I'm left wondering if the resources of their company just weren't sufficient to compete when larger companies with more product diversity came to take on the same market.

>The profit on an average Android phone is about a penny.

This is an exageration right? I know we're giving $10 to MSFT for every phone or whatever, but a penny?

Remember the low end models that have large market share in developing countries.

"Look around the Android market, and it’s Apple that captures north of 90% of the device market’s profits. Samsung soaks up the little that’s left, and manufacturers like LG, with its well-received G3 and G4 family, tend to make around 1 cent per phone in net profit."[0]

[0] http://www.extremetech.com/computing/211972-htc-declared-eff...

I found a few articles that backed it up for various companies, but they all used formulas like "total profit of mobile division per quarter / total number of phones sold", which seems like an awful metric. It's not like increasing the cost of a phone by 1¢ would double their profits.

With the same method, you can look at a bunch of Tesla's quarterly reports and say that they lose tens of thousands of dollars for every car they sell. It's marginally true, but not very informative.

No, not really -- most of the companies float around breakeven.

When branding is only skin deep and you're competing on price your days are numbered, from day 1.