Samsung, HTC Results Polarized With Android
Samsung and HTC had markedly different holiday quarters, with Samsung boasting 73 percent operating profit and HTC seeing its profit fall 26 percent amid tough competition.As much as Google's (NASDAQ:GOOG) Android operating system has been a rainmaker for Samsung's financial results, HTC shows the other side of the story.
South Korea's Samsung, which emerged as the top seller of Android smartphones and tablets, reported a major 73 percent gain in operating profit to 5.2 trillion won (U.S. $4.5 billion) for the quarter ending in December.
Why are Samsung and HTC, which have made Android their flagship smartphone platforms, heading in opposite directions on the financial front? HTC, which built the first two Android phones, worked with Android creator Andy Rubin to build the Google Nexus One "pure Google experience" smartphone. In 2010, HTC sold millions of units of the HTC Droid Incredible from Verizon Wireless and the HTC Evo 3G via Sprint. The company became the fourth largest maker of smartphones worldwide. The tide turned in late 2010. While HTC sporadically launched its devices, seeding different carriers with different handsets, Samsung launched the Galaxy S smartphone line offering a separate device for each of the four major U.S. carriers. Samsung continued this success in 2011, launching the Galaxy S II models on AT&T (NYSE:T), Sprint and T-Mobile, and rolling out the Galaxy Nexus as the first Android 4.0 Ice Cream Sandwich smartphone. HTC's biggest Android launch was the HTC Thunderbolt, which sold reasonably well as the company's first 4G LTE (Long Term Evolution) handset on Verizon's network. The company also sold the HTC Evo 3D 4G handset for Sprint (NYSE:S). However, HTC also lost Chief Innovation Officer Horace Luke, who drove the Android phone innovation for the company. Samsung, which also sells smartphones based on its bada OS, is expected to sell 32 million to 35 million units in the quarter. Such numbers may only be rivaled by Apple's iPhone, which is expected to enjoy its own record holiday quarter and total year sales. With Samsung pacing the Android market and Motorola looking to Google for financial backing via acquisition, HTC may be the odd Android OEM out. Perhaps it will find better success with Windows Phone in 2012.