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.
Conversely, HTC, which like Samsung is locked in a patent
infringement lawsuit with Apple (NASDAQ:AAPL) over the designs of its Android
smartphones, saw its profit fall 26 percent to 11.02 billion New Taiwan dollars
from 14.8 billion NT dollars a year ago.
A big portion of Samsung's profit came from its sale of
its hard disk drive storage unit to Seagate for $1.38 billion.
Samsung's solid quarter may also be attributed to its record 300 million-plus
mobile phone unit sales, with its Galaxy S and S II smartphone line
representing tens of millions of unit shipments.
HTC chalked up the downfall to weaker handset sales in a
competitive climate where Samsung, Nokia (NYSE:NOK) and Research In Motion (NASDAQ:RIMM)
are all jockeying for consumers' wallets.
Not to leave
HTC alone in despair, Motorola Mobility (NYSE:MMI), which is in the process of selling itself to Google, warned of an earnings
shortfall after the bell Jan. 6, racking up
sales of $3.4 billion. That's below analyst expectations for $3.88 billion, according to Thomson Reuters.
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.
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