If they weren't capable of meaningfully differentiating themselves in some way then they needed to brace for the race to the bottom. The problem was HTC still thought it was among samsung/apple's peers.
That's the core issue. Till 2014 they thought they without a misstep here or their they would be hanging with Samsung and Apple. That they just needed to right the ship and sales on their premium products would pick up. The crux of the matter is they either need successive success's in hardware with software that pull back consumers. They will lose money and it will take a bunch of time and will probably ultimately fail. Or they need to realize that they aren't a Tier 1 supplier and have a wider array of equipment including a flagship phone that costs less than their competitors. But they really need to spread out and hunt for the mid level $300-$400 phone market. Honestly if they built up a real decent mid range market of phone and started becoming profitable again they could still go after the premium phone market but they wouldn't be beholden to their flagship business.
I mean just look at Samsung got to where they are. It wasn't Galaxy S line from the beginning. They still have dozens of variations a year and if the S line takes a stumble they will still be pushing 10's of millions of their phones. They built a stable of alternatives that got people to buy cheaper Samsung phones and then these people eventually would step up to the S as the S line got better.
Another thing that hurt HTC is the move away from subsidized phones. Back in the day no one really paid attention to the retail cost of the phone. It was always $200. People are going to be less and less willing to buy full priced, premium phones, if they don't have confidence in the company or the phone itself.