Apple risks making the ``wrong choice" by not offering consumers enough smartphone models.
Those were the unintentionally ironic words of an HTC executive four years ago, and came just weeks before the Taiwan company posted its third of 12 consecutive quarters of declining revenue. At the time, HTC was releasing dozens of phones each year. Apple was releasing just one.
The Indian smartphone maker Micromax may want to take note. The local hero, which trails only Samsung in market share nationally, has decided to release 15 new devices. At the same time, it changed its corporate slogan to ``Nuts. Guts. Glory," in a bid to appear strong, bold and contemporary.
The result is a huge library of devices with many barely distinguishable from one another. Its Canvas juice 4G and Canvas mega 4G, for example, are just half an inch different in screen size with only minor changes in product specifications.
HTC's strategy worked for the shortest of times: It overtook Apple for market share in just one quarter in the U.S. -- at the end of an annual iPhone cycle -- and has fallen precipitously since. Its plethora of smartphone models is not the only reason for the decline. The company has been beset by production problems, weak marketing, and poor management -- which can all be put under the banner of hubris.
Yet if HTC has learned one thing, it's that a large portfolio of products is no guarantee of a sales boost. Instead, a broader offering means extra expenses because each model incurs so-called non-recurring engineering costs, which can only be recovered at certain volumes. Then there are inventory costs, whose impact can't be overstated, since smartphones start losing value the minute they're made. Both of those combined are then exacerbated by intra-brand cannibalism and customer confusion that often hinder, rather than help, sales.
HTC decided finally to streamline the lineup to ``optimize" its portfolio last year, a strategy it had been hinting at for a while. Samsung had already acknowledged the problem of an overweight catalog back in 2014 and moved to slim down. Its Indian market share actually rose 4.8 percentage points in the December quarter, proof enough that the less-is-more approach wasn't hurting.
On the surface, it sounds reasonable for Micromax to leverage its local-hero status and growth momentum with a flood-the-zone strategy. After all, India is likely to be the world's largest smartphone market, and the company wants to make sure it has every corner covered.
Yet history shows that as markets mature, catalog consolidation often results. So Micromax's gutsy move to chase smartphone glory may turn out to be just nuts.
This column does not necessarily reflect the opinion of Bloomberg LP and its owners.
Apple has since broadened its offering, but it's still one of the slimmest catalogs in the market.
HTC went through six senior managers in three years, while marketing chief Ben Ho stayed in his post for 18 months before resigning.
To be sure, there's more than one reason why a brand's share rises or falls, yet such a large increase in share shows that a smaller catalog isn't detrimental.
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