Processors and chili peppers: How HTC is like Hoy Fung, the company behind Sriracha
Earlier today Quartz profiled David Tran, the man behind the Sriracha hot sauce, an international sensation that has been used in everything from sushi and potato chips to soup and PF Chang's meals. Tran told Quartz that he hasn't raised the wholesale price of the sauce since he started selling it 30 years ago, that he doesn't know where it's sold, and that he doesn't care about profits. He just wants to make a good hot sauce.
It seems that HTC is beginning to think the same way. It still cares about profits, of course, but it no longer seems willing to compete with Samsung or Apple for mobile dominance. The company simply wants to make good smartphones, tablets, and wearable computers.
"The market is really big. HTC is a small company. For us to stay competitive and survive is not a huge problem,” HTC CEO Peter Chou told the Financial Times, adding that HTC needs only to snag five percent of the global smartphone market to remain in business. "People need to look at it that way, rather than [saying] we have to beat the other guy who has a 50 percent market share."
HTC might need to fade into the background in order to do that. The company has reportedly engaged in talks with Amazon to build its smartphone, a long-anticipated device that might require the experience a manufacturer like HTC has to build. It previously released the first --and so far only -- smartphone to ship with Facebook Home pre-installed, and it also developed co-branded products like the Droid Incredible for Verizon or the MyTouch series for T-Mobile. HTC makes good products; it simply isn't good at selling them.
The company has denied that it is for sale despite declining marketshare and financial results. (It posted its first quarterly loss earlier this month.) That doesn't mean that it won't partner with other companies to use its product expertise while mitigating its relatively weak sales and marketing efforts, though. HTC might be taking a page from Tran's playbook by focusing on its products instead of the less-glamorous aspects of the smartphone business.
Tran has long avoided working with larger companies. "People who come here are never interested in the product, only in the profits,” he told Quartz. Sriracha is a hot sauce first and a money-maker second.
HTC attempted to do something similar with its smartphones. Analysts have wondered at the company's insistence on using high-end materials and focusing on product design instead of profitability. These decisions led to thin margins and supply issues, which contributed to the company's financial troubles. Chou tells the Financial Times that HTC remains "diehard about design" despite all those setbacks.
On the surface, HTC and Tran face very different problems. HTC's products are less popular than they were before; Sriracha is becoming more popular every year. HTC failed to effectively advertise its products and in turn ceded more of the smartphone market to Samsung; Tran says that he can't advertise Sriracha because he wouldn't be able to meet demand. HTC is working with metal and glass and silicon to make electronics; Tran is working with peppers and spices and garlic to make hot sauce.
But underneath all that, it seems that HTC and Tran have more in common than you might think. Both are focused on making the best product and making sure it gets to people who want it without worrying about competing with other, larger companies. Both have their fervent admirers and their dismissive nay-sayers. And both are trying to stay true to their original mission despite constant pressure from other businesses, customers, and pundits.
[Image courtesy ilovememphis]