HTC = High Traffic Counts?

The announcement this week that Android is now the leading smartphone OS in the US, surpassing both RIM and Apple, is a potential watershed moment in the wireless device market. When the first Android phone — the G1 — launched in 2008, the thought that Android would surpass RIM for smartphone supremacy seemed outlandish. There are a number of reasons for Android’s rapid ascent in 2010, but one of the most important reasons is also one of the simplest: Product adoption begins with consumer interest, and if you want to maintain consumer interest, it helps to regularly launch new products. And, if those new products happen to very good, consumer interest will dramatically and quickly increase.

In just the past six months, we’ve seen a steady flow of very good, "˜buzz-worthy’ Android devices: the HTC EVO and Droid Incredible, the Motorola Droid X, and the Samsung Vibrant and Captivate. While no one Android device could be considered a "˜block-buster’ hit on par with the Apple iPhone 4, collectively they have helped to drive significant, sustained consumer interest in the Android platform. And the ability to drive interest share gains through an aggressive product launch strategy holds true even within a specific manufacturer. Consider HTC.  As we see below, a deep product pipeline of Android devices — HTC released at least one new device a month from February to July — has been a boon for the Taiwanese manufacturer.

HTC and RIM began the year garnering nearly an equal share of consumer interest, but since the announcement of the EVO 4G in March, HTC’s share of interest steadily grew.  Again, it helps that many of HTC’s devices were very popular — of the top four devices consumers shopped for in Q2 2010, three were from HTC.

But just as important was the company’s ability to consistently generate market buzz. Some of this buzz was the result of dramatic innovation — when it launched, the EVO had the most feature-rich hardware of any phone — and the significant carrier marketing investments that accompany the launch of an innovative new device. But some of this buzz was also through more modest, incremental moves, such as expanding an existing device design to a new carrier partner.

Conversely, the performance of RIM — which largely has the same portfolio and carrier partners today as it did at the start of the year — is uninspiring. That’s why RIM’s announcement of the Torch — its long-awaited new smartphone, and the first with the BlackBerry 6 OS — is so significant. RIM’s strength has always been building email-centric devices with great keyboards, battery life and durability to appeal to hard-charging corporate executives. But the market is clearly moving away from email-centric, QWERTY keyboard devices (across all carriers, interest in devices with touchscreens increased 11% from Q1 to Q2, while interest in devices with QWERTY keyboards decreased 13% quarter over quarter), and RIM needs to respond to this shift.

With the Torch, RIM has built a device with all of the traditional Blackberry attributes AND the touchscreen, multimedia, web-browsing features that consumers demand today. Will this two-in-one approach hit the mark, or will RIM continue to lose interest and marketshare to HTC (and Motorola and Samsung, not to mention Apple)? We will know very, very soon.

About Alo Mukerji:
Alo Mukerji is the Managing Director of Product Strategy at Compete. At Compete she is responsible for identifying new product opportunities and long-term product roadmap. Before Alo joined the Compete team she worked at Constant Contact where she helped to expand the product suite beyond email marketing. Alo specializes in new product selection and definition, product management, and product pricing. She can be found on LinkedIn at www.linkedin.com/pub/alo-mukerji/0/154/9a7