The Rise Of Samsung, The Fall Of HTC

By James DeRuvo (doddleNEWS)

When Steve Jobs declared he would fight with every last dime the spread of Android, he had several targets … Google, Samsung, and HTC among them. And Apple began a worldwide, protracted legal conflict against what Jobs called a “stolen technology.” The results have been mixed with some victories and some losses. The victories have usually been on their home turf (the United States), while their loses have been mostly in Europe.  And while Samsung has benefited from those victories, rival smartphone maker HTC is taking serious hits, even though it has benefited from a recent legal victory. Has the damage been done?

Our smartphones are flying off the shelves, with some outlets reporting 40-60 percent sales growth, but that’s distorting the overall trading outlook which is more challenging due to the weak global economy and a weak euro.” – Samsung Internal Report

Sales figures from recent quarters show that it’s legal battles with Apple aren’t hurting them much.  In fact, Samsung is enjoying a record quarterly profit of $5.9 billion.  But while the Korean electronics giant is moving in the right direction with their smartphones, there isn’t celebrations going on in their boardrooms because their largest consumer electronics market, Europe, is teetering on economic collapse.  It hasn’t greatly affected Samsung’s smartphone division just yet, but other sectors of the electronics giant’s divisions are taking enough damage that Samsung has opted to move towards a contingency plan of cost cuts and product price increases to weather the storm brought about by a dramatically weak Euro.

But what’s really helping stave off disaster is the brisk sales of the Samsung Galaxy S III, which is shipping at over 19 million units this quarter and giving a profit of over 4 billion dollars US all by itself.

The story is dramatically different for HTC and it illustrates just how quickly a smartphone manufacturer can practically corner the market one minute, and plummet the next.  It was only a year ago when HTC was at the top of the Android heap, putting out great smartphones like the Droid Incredible 2 and the EVO 4G.   Then Apple came out with the iPhone 4S and enjoyed a record year of sales.  Then Samsung came out with the Galaxy series.  Both companies accounted for nearly 200 million smartphones world wide, and suddenly, HTC was struggling to keep up.

“In the high-end market, there are Samsung and Apple. In the low-end market, even though HTC wants to gain traction in China, its phones are price uncompetitive,” said KGI Securities analyst, Richard Ko.

Coupling this with delays in launching HTCs new One line in the US due to custom inspections that have held up it’s launch.  And with Apple rumored to be coming out with a new iPhone 5 by the holiday shopping season, and Samsung enjoying brisk sales of the Galaxy S III,  is HTC looking at a complete write off for 2012?  It may be.

But 2012 is not all bad news for HTC.  A UK Judge this week cleared the smartphone manufacturer of infringing on Apple patents like the slide to lock feature and other touch screen centric features.  Apple was aplomb about the ruling, saying “Competition is healthy, but competitors should create their own original technology, not steal ours.”

HTC replied that while they are happy with the UK ruling, that they “remain disappointed that Apple continues to favor competition in the courtroom over competition in the marketplace.”

Source: Reuters here and here, and BGR.

About James DeRuvo

James has a multi-faceted career that spans radio, film and publishing. A writer about the technology in the video industry for nearly 20 years, James is also an award winning film director, having garnered a Telly Award for his short film Searching for Inspiration. He's also worked as a producer of many talk radio programs in Los Angeles with topics ranging from entertainment to travel to technology.