It sounds like HTC are a run by a bunch of idiots. Firstly, HTC cannot compete with Samsung, and they shouldn't even think about doing so at the moment. Samsung turned over over $200 Billion in 2012; HTC turned over under $10 Billion.
Does that matter? No. Not in the slightest. HTC need to concentrate on being the 'go to' company for tech geeks and those 'in the know', generate a buzz about having handsets which always do everything right. Then, a carefully orchestrated ad campaign supporting the glowing magazine reviews and the slew of of people leaving Apple and Samsung and tweeting and posting about how great HTC phones are.
How about an HTC One which is also water and dustproof with a 3000 MAh battery? And, as it is slightly thicker, get a better lens and bigger sensor in it - maybe an 8 ultrapixel camera anyone? Put a decent set of headphones in the box too.
Make a smaller phone which is basically the same but with a smaller, but equally hi-res screen in pastel colours which appeals to women more.
Put together a ****-hot dev team who work to update Sense as soon as Android updates are out. Make the sense framework as portable as possible, facilitating movement across OS updates more quickly. Google new Play framework will help here.
Pay your marketing team to go online and search for people who are disgruntled and try and find out what the complaints are about. Ask the Smartphone community what they should be looking at developing - guys like Anandtech and XDA and AC.
I don't have a crystal ball, and I have no idea how HTC is run, but things like this suggest there are a lot of idiots involved along the line, making stupid and hasty decisions - probably because of pressure from higher up as they themselves are pressured by the Chairman to get 'results for the shareholders' so he doesn't lose his obscene bonus.
Apple have managed to build great phones which are damn close to being perfect, there is no reason HTC can't.