There has been such heavy focus on advanced video and graphics, in recent launches of superphones and their chips, that other key elements of the multimedia device have been almost forgotten. But camera and music can still be important differentiators, at least according to some of the vendors which are struggling to grab back some share from Samsung and Apple.
Nokia’s biggest splash this year has, ironically enough, been a Symbian phone, the 808 PureView which not only built on the Finnish firm’s well established cameraphone credentials, but added a massive 41-megapixels to the mix. This has led large numbers of fans either to demand a Windows version soon, or to regret that Nokia backed away from Symbian so quickly at the high end.
Both Sony and HTC have been chasing the music and audio aspects of the mobile space, despite the looming monster of iTunes. Sony has been leveraging its venerable Walkman brand for years in its phones ‘ though inexplicably, its handset unit has downplayed the name lately ‘ but it has also been emulating iPod Touch by creating music players with smartphone operating systems but no cellular connectivity.
It has now added Android 4.0 to the latest Walkman models (F800 and E470), promising a ‘richer, bolder and louder presence’ through Sony’s S-Master Digital Amplifier technology. The devices will also integrate the Sony Entertainment Network’s cloud-based Music Unlimited Service, with access to more than 14m songs.
Android has always seemed logically destined to expand from phones and tablets into all kinds of consumer electronics but its progress in media players has been limited, partly because of a lack of interest from Google and partly, perhaps, because there is little need for a full OS in most such gadgets (not to mention the dominance of Apple). Sony launched its first Android Walkman, the Z Series, early this year, while Samsung has Galaxy Player and Archos also offers similar gadgets. But it is hard to justify $250 or more for a product which performs only one function really well, and has a smaller screen (and not that much better sound quality) than a phone. Single-purpose devices either need to be cheap and highly optimized for their task, like good ereaders, or embrace a wide variety of surrounding functions, like the newer Nintendo models.
The alternative to an Android music player is a phone with really good audio, headphones and cloud music services. This is where HTC has hoped to score, but its strategy suffered a setback this week when it sold back half the stake it had taken in audio and headphones specialist Beats Electronics, which it bought in August 2011 for $300m.
Then, HTC acquired a 50.1% stake in the headphone and accessory firm, which was designed to associate the HTC brand with high quality and cool music ‘ through Beats’ audio technology and its ownership by rap legend Dr Dre and hiphop bighittter Jimmy Iovine. With the launch of the quad-core One X in February, HTC continued to push the link with advanced quality sound, as part of a broader bid to create a media platform around its devices. But while that may be a necessary move to play in the handset top tier, it is tough to take on the brand, resources and media assets of Apple iTunes and Samsung.
So the partnership with Beats was never going to be more than a sticking plaster, and now HTC will sell back half of its holding for about $150m, putting the headphone maker back in control with 75% of its company. HTC is expected to lose about $5m on the saga though it remains the largest outside shareholder.
In its statement, the handset vendor said: ‘Over the last year, HTC and Beats have made great progress in sound innovation, product integration and brand awareness with successes like the HTC One. HTC and Beats will continue to work closely, including a joint global marketing campaign later this year.’ It added that the change of ownership ‘”provides Beats with more flexibility for global expansion’.
HTC will still codevelop technologies with its partner and retain exclusive rights to those joint efforts, and it will lend Beats $224.9m for one year. But the reversal indicates that Beats was not sufficient to change HTC’s fortunes, and that it is likely being forced to cut costs and centralize its structure and R&D, in the face of Samsung’s onslaught.
However, HTC’s change of heart may be more about internal issues ‘ reports indicate it has not met all the financial commitments it made to Beats as part of the original deal, prompting the partial buyback.
Earlier this month, Beats Electronics acquired digital music service MOG for an undisclosed sum and this was widely expected to form the basis of a music streaming service to be launched by HTC and coupled with the Beats headphones. That strategy, too, may now have foundered on the rocks of trying to take on iTunes and Samsung Music Hub.
However, HTC continues to develop strong Android devices and to innovate at a rapid pace, despite its market share and resource challenges. It has become the first to announce the upgrade to the latest Android 4.1 release, Jelly Bean, for its One X, One S and One XL flagships. At a time when many high end handsets out there have not even received release 4.0, or Ice Cream Sandwich, this should be a powerful loyalty factor for HTC One users, although precise timings are not yet confirmed. Google’s own Nexus 7 tablet is the only device currently running Jelly Bean (though the Samsung/Google Galaxy Nexus is still likely to pip HTC to the post with the upgrade). But a handset needs a defining quality, as well as plenty of content to support that ‘ and HTC has taken a step backwards in the music arena.