In a painful start to the week, HTC’s stock has fallen so precipitously that the company is worth less to investors than the cash it has on hand. It is, in other words, essentially worthless. That’s a striking collapse for a business that was, not long ago, the most popular Android manufacturer in the world.

The obvious reaction in times like this is to look for what HTC did wrong. Surely some gross misstep led to the free fall, some teachable moment emerging from the wreckage. But HTC was neither stagnant nor incompetent. It regularly introduced novel features, many of which were smart and useful. It created consistently good smartphones. It seemingly did enough to, if not lead the pack, at least stay in its general vicinity.

In fact, what did HTC in wasn’t HTC. It was a smartphone market that simply doesn’t have room for more than a handful of players, one in which being different no longer counts for much.

The Big Squeeze

In fall of 2011, things couldn’t have looked better for HTC. It had the second-largest North American smartphone market share, according to Gartner, just one percentage point shy of Apple’s iPhone. In fact, on the strength of its Evo line, HTC sold one out of every three Android phones in the region, and one in five smartphones of any kind.

Those numbers look even gaudier when you remember that, at the time, both BlackBerry and (more so in international markets) Nokia were far more competitive than they are today. HTC dominated them all.

Less than four years later, HTC barely registers. Its North American market share clocked in at 3.5 percent in the first quarter of this year, according to Gartner, good enough only for seventh overall. The worldwide picture is even more grim; HTC has only 2 percent of the global smartphone market.

“We have a market that’s essentially bifurcated,” explains Gartner research analyst Tuong Nguyen. “On the high end you really just have Apple, because they have that mindshare with consumers… it’s extremely tough to compete there, even for someone like Samsung.” In fact, Samsung’s the best example of how difficult it can be to compete against Apple at the top end of the market; it lost 10 points of market share to its Cupertino rival in just the fourth quarter of last year.

“Then you have the lower-end market, the mass market,” Nguyen continues. “HTC doesn’t so much play in that end of the market, which makes it hard to get the volume they need to compete in the market share game.”

While companies like Samsung and LG consistently offer direct iPhone competitors, they both also round out their portfolio with enough midrange and affordable models to stay competitive. While HTC makes a very good $650 (unlocked) smartphone, its budget play, the HTC Desire, doesn’t do much to impress, even at its more reasonable price point.

“Samsung has become the de facto high-end Android manufacturer,” explains IDC research manager Ramon Llamas. “Like it or not, that’s the way it is, and the way a lot of people think of Android. Then you look at the low end, and that’s where you have a lot of the global manufacturers. HTC came in a little later with Desire. Great idea, but they were behind.”

Squeezed out of the high end, late to the low end, with not much middle worth fighting for. That doesn’t leave HTC with much maneuvering room. But how did it get in such a tight spot? It wasn’t for lack of effort.

Feature Comforts

You would expect the four years of HTC decline to include a disastrous product release, if not a string of them. That’s not the case, though.

2013’s HTC One was the first Android phone that could match—or even exceed—Apple’s design standards. It also introduced the world to “UltraPixel” camera technology, which theoretically let in more light (but in practice resulted in mediocre shots). The following year’s HTC One M8 included a 5MP front-facing camera, an appeal to the selfie set before “selfie” was even in the dictionary, and a host of innovative, built-in camera app features.

More recently, this year’s One M9 holds onto a microSD card slot at a time when Samsung’s Galaxy line abandoned the same, and offers a tremendous array of customization through HTC’s continually evolving Sense skin. Its “Uh Oh” protection program lets you return a phone damaged within one year for a free replacement, no questions asked.

“HTC innovated and thought up interesting ideas over the years,” says Nguyen. “It’s definitely in their DNA to evolve and change and bring this innovation to market.”

None of which sounds like a company that should be gasping for air. But in today’s smartphone landscape, dreaming up a clever new feature or two simply isn’t enough. You need a lot of them, and you need them all to hit.

Take HTC’s software, which between its bevy of camera features, customization with Themes, and news/update delivery system Blinkfeed manages to feel remarkably fresh in a sea of Android sameness. They all help mark HTC as a forward-thinking manufacturer, but have a much harder time standing out in a world of 1.6 million Android apps.

“Are they doing good things? Yes. Are they doing them the best of everybody? I don’t think so,” says Llamas. “You talk about some of these applications that they have… You can get awesome photo editing abilities for just about every phone that’s out there. Blinkfeed is awesome and everything, but I’ve already got Flipboard. This is where innovation for a lot of smartphone makers is starting to plateau.”

Even the areas where HTC can gain major ground have benefits with limited life expectancy. It wasn’t long after the original One that other Android OEMs had ogle-worthy handsets of their own, because it’s easy to copy anything if you throw enough money at it.

“You have vendors like Samsung. They have enormous resources, and they are very well known for being a fast follower,” says Nguyen. “It makes it very hard for a player like HTC to come up with something interesting. And even if they did revolutionize the industry, I don’t know how long or short of a time it would take for Samsung to come along and mass-produce the same idea.”

And that’s not even to mention the chances HTC has taken, mostly outside of the smartphone, that have been outright failures. The Re is a refreshing rethink of the action cam that looks like a small periscope, but it also has no on-board display, and lacks the variety of mounts needed to make it truly competitive with incumbents like GoPro and Sony. Meanwhile, a smartwatch HTC confirmed it was working on well over a year ago still has yet to materialize.

HTC, then, is in an incredibly tenuous position. Its breakthroughs, impressive as they are, are either insufficient or easily copied. It’s unable to compete at the top of the market, and so far has been unwilling to flood the low. Efforts to branch outside of smartphones have been so far unsuccessful. Its investors think it’s worthless in the most brutally literal sense.

So… what now?

Wait and HTC

“The name of the game right now is survival and maintaining market share as you’re being crunched from both ends,” says Nguyen. “I think there’s still opportunity there, but it’s going to take a little while.”

Eventually, the iPhone could dip, as it did (slightly) between the iPhone 4 and iPhone 6, opening the door a crack for a quality-focused company like HTC. Outside of smartphones, the wearables market is still up for grabs, as is virtual reality, another area in which HTC has dug a trench.

Being ready to take advantage of those moments, though, involves still being around to chase them. Which is why for now, the future HTC wants to talk about understandably involves saving money.

“HTC is focused on enhancing the brand and improving the business through a combination of company-wide initiatives that include increasing operating efficiency and accountability,” said an HTC spokesperson in an emailed statement. “Details of the cost reduction exercise remain confidential, but will include strategic cuts in certain areas of the business, while increasing investment in growth areas of the business that will deliver return on investment and shareholder value.”

Likely translation? A little less trial and error, at least for now. Which makes sense, given that if HTC has proved anything since 2011, it’s that a novel idea won’t save you. In fact, it’s often not worth the trouble.