HTC lands a coup with the holiday flagship position at the nation's largest carrier, which should bring some optimism back to the company.
HTC needed a slam dunk to reverse its fortunes. It may just have one with the Droid DNA thanks to an assist from Verizon Wireless.
HTC takes over a position largely occupied by Motorola Mobility over the past few years, and the coup couldn't come at a better time. The company badly needs a hit product to revive its prospects. Last month, it posted yet another round of disappointing quarterly results, with revenue and profit fell even more than Wall Street and the company expected.
Yet there are signs of hope for HTC. The Droid DNA's holiday flagship slot represents the first time Verizon has given the company's full backing. While HTC has had a few Droid phones, including the well-received Droid Incredible, it was never the Droid phone at Verizon until now.
"We've transitioned from that support role to a leader with some big weight behind it," HTC President Jason MacKenzie told CNET.
Verizon Wireless, without going into financial details, promised a heavy campaign for the smartphone.
"Customers will know this is an important device for us," Verizon Wireless Chief Marketing Officer Tami Erwin told CNET.
The large wireless carriers can often act as kingmakers, with their marketing clout driving sales that a handset manufacturer couldn't do alone. Verizon, in particular, has been adept at selling smartphones under its Droid brand. The original Droid, for example, saved struggling Motorola Mobility from sinking into complete irrelevancy and showed consumers that there was a real alternative to the iPhone.
Android phones tend to do better on Verizon than on rival AT&T. Android smartphones still outsell the iPhone at Verizon, while Apple's hit phone takes up a majority of sales at AT&T.
Droid DNA long in the works
Verizon and HTC got together 18 months ago to jointly develop the smartphone. The goal: to reinvigorate the Droid franchise with high-end specifications and a sleek design, while at the same time bringing it back to the franchise's roots -- which was the basis behind the DNA name, MacKenzie said.
The process was different from the standard routine of a vendor coming to a carrier with a prototype and the carrier selecting and customizing it. HTC and Verizon worked on the product from the get-go, with the intent of creating a flagship phone.
"We hoped for a flagship phone, but we had to first deliver," he said.
MacKenzie compared the situation to how HTC worked with Sprint Nextel closely on the original Evo 4G, which was the first smartphone able to tap into a 4G network. The new technology forced the two to collaborate more than on a normal product.
The difference this time was HTC was working with an already well-known brand.
MacKenzie said the companies wanted to put in next year's technology into a phone they could sell now. That included a high-definition display with more pixel density than the iPhone 5 or Galaxy S III and a faster quad-core Snapdragon processor from Qualcomm, among other high-end specs.
Verizon also had a lot of early input in the device. The edge-to-edge glass display and wireless charging capabilities, for instance, were put in at the carrier's request. Erwin said the carrier had more control over the design and features of the phone because of it was intended to be a Droid phone.
The Droid DNA shares many similarities with the Butterfly J, which was announced in Japan with KDDI. MacKenzie said that while HTC and Verizon had jointly developed the DNA, HTC had seen an opportunity to build a variant for KDDI midway through the development process. He said Verizon didn't have an issue with it, since the two carriers don't compete.
Wind picking up behind HTC?
Can HTC pull its turnaround off? That remains to be seen, but there are a few things moving in its favor recently.
Over the weekend, HTC and Apple settled their long-running patent dispute. While the company is expected to face additional financial pressure after settling its patent dispute with Apple, MacKenzie said he doesn't believe the settlement will have a material effect on the financials.
If nothing else, the end of the legal squabbling means HTC rids itself of a damaging distraction at a time when it needs to focus on its products.
HTC has worked to simplify its lineup, and has quietly positioned some strong smartphones at some of the major carriers. Beyond the Droid DNA, there's the
HTC is also getting the benefit of Microsoft's implicit endorsement that its
HTC should benefit from Verizon's push, but it's still unclear whether consumers want a phone that big. The companies compare it less to Samsung's jumbo
While MacKenzie said he believes the Droid DNA will help with HTC's financials, he takes a more holistic view on the company's comeback.
"It's not just about one phone," he said. " It's about a portfolio of products that stack up well against our competitors."