Taiwanese smartphone manufacturer HTC has suffered a 25% fall in fourth quarter profits while one of its biggest rivals in the smartphone market, Korean electronics giant Samsung, has turned in a profit improvement of more than 70% for the same period.
HTC is the fourth largest smartphone manufacturer but has struggled to maintain its early success in the smartphone market with its recent handsets losing ground to competitors, most notably Samsung’s Galaxy range of devices.
Though HTC doesn’t have the diverse product portfolio that Samsung does, the Korean company says that the smartphone division is now its most profitable. Samsung recently overtook Apple as the leading manufacturer of smartphones with its Galaxy devices outselling the iPhone in the third quarter.
Part of Samsung’s good performance can be attributed to the fact that it manufactures components such as processors and displays for various competitors, including Apple. As the demand for smartphones has grown, so too has Samsung’s component business.
HTC has had a turbulent few months, losing a patent battle with Apple in the US in October. The company’s share price fell 6% in the wake of the ruling.
Ryan Smit, head of BMI-TechKnowledge’s consumer division, says HTC’s poor showing can be partly attributed to its recent handsets failing to prove as popular as previous ranges. He says the company has also offered too many devices when compared to some rivals like Apple.
“Both Apple and Samsung focus on flagship devices,” says Smit. “The Samsung Galaxy S II has been punted across the world.”
He says Samsung has also spent far more on marketing than HTC.
According to BMI-T’s most recent Digital Lifestyle Programme survey of 1 000 SA smartphone users in metropolitan areas, Samsung enjoys 17,7% market share, with HTC trailing at 1,6%. — Craig Wilson, TechCentral
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