Android OEM death watch: Sony, HTC, and LG edition

Android OEM death watch: Sony, HTC, and LG edition ,

If Android OEMs were just that, original equipment manufacturers, their jobs would be much simpler and easier. But in the modern smartphone world, it’s not enough to just design and build new gadgets to a high spec; you have to power them with your own tailored software, you have to support them with updates and security patches, and you have to price them enticingly, too. Not everyone has been doing a particularly good job of this, and as the ranks of Android OEMs continue to swell, escalating competition might push some familiar names out of the game altogether.

Let’s start with Sony, the most endangered species in the Android realm. Sony only really knows how to make premium devices. Over the course of the past three years, its Xperia Z series has evolved at a breakneck pace, going from Z1 to Z5 to the present XZ, but it’s never changed in character. The typical Xperia flagship phone costs a lot and has the latest specs and an eye-catching design, but it also tends to launch without the latest Android on board, and its great camera is usually hamstrung by bad software. That’s exactly what I experienced with the Xperia XZ at IFA this year: beautiful on the outside, high engineering on the inside, but outdated Android and unconvincing camera software.

Sony phones are pretty, but also expensive and late

As a fan of Sony, it pains me to watch the company repeat the same mistakes every year. The new XZ arrives in October with specs and software equivalent to the ultra-affordable Xiaomi Mi 5 of this spring or this summer’s excellent OnePlus 3. So the XZ is thus late to the party, more expensive, and, other than that handsome four-letter brand, not unique in any meaningful way. Better alternatives also exist in Sony’s self-selected premium tier, where the iPhone 7, with its freshly minted iOS 10, is going on sale this week, following record presales in the United States. By next month, Google will be serving up its own new phones with the latest Android on board, and Sony’s efforts will barely register as a bleep on phone buyers’ radar.

By this point next year, I’m not convinced that we’ll have a Sony Xperia flagship to talk about. Sony has gone from reorganizing and streamlining its mobile business to pretty much shrinking it out of existence.

HTC can’t even afford to host launch events anymore

Similarly dire things can be said of HTC, the company that once defined the cutting edge of Android smartphones, but which has now engaged most of its energies and time in developing the promising Vive VR headset. What has HTC’s mobile division done in 2016? Well, it launched the HTC 10, an undeniably well built device with some of the best audio equipment around, great performance, and a very solid camera. And it priced that slab of new technology at a princely $699. Nice phone plus high price hasn’t equaled many sales, but HTC truly compounded its woes with a horribly uncompetitive midrange offering: the Desire 530 and 630 launched at MWC this year were out-specced in practically every way by cheaper Chinese alternatives.

At IFA this month, HTC announced a One A9s, which, staggeringly enough, was a downgrade on last year’s One A9, with its lower screen resolution and other cutbacks justified by the premise of bringing premium aluminum unibody design to the mass market. It wasn’t even an hour later that Huawei buried the A9s with its own aluminum unibody Nova phones, both of which have generous batteries and up-to-date processors. HTC is being lapped by more agile and cost-effective rivals, and its traditional advantage of having better design has basically evaporated. As of this year, HTC’s biggest cost-cutting innovation has been to conduct "virtual" launch events via online live streams.

LG misfired with the G5, then buried the V20 under the iPhone hype avalanche

That brings me to LG, which you might not think is in all that much danger, but the Korean company has had a wretched year in mobile. After ignoring the trend toward metal phones for years, LG finally cast off its glossy plastic backs for a thin aluminum shell on the G5, but its 2016 flagship was sunken by a miscalculated move to a modular design. Without the seamless aesthetic appeal of a Galaxy S7 or the alluring pricing of a Huawei P9, the G5 has fallen into this year’s also-ran bin.

This month’s launch of the LG V20, a day before Apple’s big event, was almost strategically positioned to bury the new phablet under a deluge of iPhone hype. The V20 actually has Android 7.0 Nougat on board, the latest version, but LG’s insistence on keeping a second screen and a removable back cover has made it quite an unwieldy beast of a device — suitable for power users, perhaps, but not a device that will generate massive sales.

Isn’t the purpose of business to generate profit?

At some point, we have to wonder why LG is even trying with its mobile lineup. Like HTC and Sony, the bottom line for LG’s mobile business has been either in the negative or breaking even for years. Sure, LG sells a lot of low-end burners, but isn’t the purpose of business to generate profit? There are no obvious synergies that any of these companies is capitalizing on, such as if Sony’s phones were enticements into an entertainment ecosystem or if LG’s devices tied in to a smart home setup. Both are things that Sony and LG have tried, and neither has really panned out into any meaningful advantage. So they just trudge on, making phones because that’s the thing they’ve always done.

For all my gloomy writing about how tough it is to be an Android OEM, it’s hard to find many big companies that have actually gone out of business while running Android. Nokia flunked out thanks to Windows Phone. Palm fell on its webOS sword, having been pushed by HP’s clumsiness. And BlackBerry actually joined the Android legion when its own BB OS fell out of favor. So Android hasn’t yet dealt the killing blow to any of its major supporters, but times are changing in big ways. Nowadays, the sales leaders are either Chinese companies, reliant on cost-optimized manufacturing and minuscule profit margins, or Apple and Samsung, the established premium-tier leaders.

The Android ecosystem has never been more diverse than it is today, but I suspect that what we’re witnessing now is a peak from which the basic economics of a maturing smartphone market will rapidly drag us down. Niche players like Nextbit, Vertu, and BlackBerry might survive thanks to their low volume of sales and correspondingly limited costs. But the big names we’ve known for so long, the Sonys and HTCs of this world, seem fated to fade from view.