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Samsung makes nearly twice the profit it did last year, increases position as standards bearer

Samsung Electronics Comp., Ltd. (KS:005930) -- currently the top Android phonemaker -- and HTC Corp. (TPE:2498) -- currently in the top three in Android sales -- reported earnings guidance (unaudited earnings) today.  While we'll have to wait until mid-month (April 12) for Google Inc.'s (GOOG) earnings and till the end of the month for pending Google acquisition Motorola Mobility Inc. (MMI) (the last of the Android "Big Three"), HTC and Samsung's reports give some idea of the state of the Android union.

By all indications the story is relatively unchaged -- HTC continues the slump it got into late last year, while Samsung continues its meteoric rise.

Samsung's estimated total sales rose to 46T Won (~$40.71B USD), up from 36.99T Won (~$32.73B USD) in Q1 2011, and almost matching its record holiday haul of 47.3T Won (~$41.86B USD) in Q4 2011.  Given that the first quarter is often far weaker than the holiday quarter for consumer retail companies, this is a great result.

Better yet Samsung's profit soared to an estimated 5.8T Won (~$5.13B USD), nearly twice the 2.99T Won (~$2.65B USD) it pulled in in Q1 2011, and more than its holiday Q4 2011 profit of 5.3T Won (~$4.69B USD).  

HTC Phone Quietly Brilliant
Quiet brilliance is no longer achieving success for HTC [Image Source: Reuters / Pichi Chuang]

What does that profit mean?  Well, Samsung does not break down its sales or profit by division in its report, but given that its DRAM and LCD panels businesses are substantially less profitable than its smartphones, it indicates that Samsung's smartphone sales continue to rise sharply.

On the opposite end of the earnings spectrum was HTC's report [PDF].  HTC posted estimated sales revenue of $67.79B TD (~$2.3B USD) and profit of $5.099B TD (~$173M USD) pre-tax, $4.464B TD (~$131M USD) post-tax.  HTC's profit has fallen an astounding 68 percent since Q1 2011 and revenue has fallen 35 percent.

HTC is scrambling to try to release new iconic handsets, as its current lineup is clearly not doing the trick.

Overall the earnings indicate that Android remains successful, but that increasingly Samsung is becoming the standards bearer for the platform, while other strong contenders like HTC fade from contention.  Samsung's success is largely fueled by slick packaging and strong marketing.  By contrast, HTC's slogan is "Quietly brilliant" -- and its own advertising efforts are true to form.  Clear Samsung's bolder approach, which in a way echoes Apple, Inc. (AAPL) is winning out.

Both companies have struggled in the last couple quarters with litigation from Apple, which has forced them to remove user interface features from their Android distributions [1][2].

Sources: HTC, Samsung

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Market betterer...
By quiksilvr on 4/6/2012 3:05:10 PM , Rating: 2
Seriously, HTC. Their marketing here in the states are virtually non-existent. They have the hardware and software, now they just need some screen time.

RE: Market betterer...
By Motoman on 4/6/2012 3:56:23 PM , Rating: 2
I think the success or failure of a given phone/company is dependant on what phones a given carrier is pushing.

Walk into any cellular phone store, for any provider, and there's assloads of phones in there. But there will be high profile positions for the phones they're really pushing...and those are the ones that get sold.

RE: Market betterer...
By StevoLincolnite on 4/6/2012 4:05:11 PM , Rating: 2
I agree. Not much advertising in the land down under either.

I think having to pay a fee to Microsoft for each Android handset sold has hit HTC fairly hard.

Also, the CEO of HTC also helped found Via Technologies, so I really hope they don't end up like them! More competition is always a good thing.

RE: Market betterer...
By abhaxus on 4/6/2012 4:41:44 PM , Rating: 2
Having held the Evo 4G LTE this week, I think it's going to be a good year for HTC :)

RE: Market betterer...
By SkullOne on 4/7/2012 7:25:27 AM , Rating: 2
This ^

I believe HTC has learned their lesson. They've slimmed down Sense for ICS. Now Sense is still crap but that's an upgrade from the sh*t that it is on Android 2.3.x.

The One series of phones are incredibly nice and EVO 4G LTE appears to be pure win. We'll see what the Droid Incredible 4G has up its sleeve as well.

Overall I think both HTC and Motorola realized they stretched themselves way too thin with so many models of phone. Not to mention the bad press they both get for not updating the phones quick enough. Easy to see how that happens when they keep releasing a new phone every other day.

RE: Market betterer...
By name99 on 4/7/2012 8:06:03 PM , Rating: 2
Overall I think both HTC and Motorola realized they stretched themselves way too thin with so many models of phone.

You understand the difference between "thinking" and "wishing", right?

You, and I, and every intelligent person in the world might agree with this strategy, but what matters is not what we think but what HTC (and Motorola) actually do. So far, at least in the case of HTC, I don't see any actual EVIDENCE of switching to this strategy.

When I go to the HTC web site, what I see is:

- for what they consider to be their hero phone, three different versions (One X, One S, One V), plus HTC Sensation(TM) XL with Beats Audio(TM) [way to choose a catchy name their, HTC]

What's the difference between these? Anything that actually matters? Does any normal customer know which to choose?
But you can bet that, between the four of them, there was ample opportunity to fritter away engineering talent, to use different parts requiring slightly different drivers, and just generally to make it that much more of a hassle to upgrade to Android 5 let alone Android 6 and 7.

- along with this crowd of four we also have Explorer, Rhyme, Sensation XE, Titan, Radar, Sensation, Evo 3D, Cha Cha, Salsa, Incredible S, Desire S, and oh my god, so many more.

RE: Market betterer...
By daveinternets on 4/6/2012 4:52:40 PM , Rating: 2
I don't think it boils down to marketing.

First and foremost, people want to use their phones as a phone. From my experience with 2 somewhat recent HTC handsets, the call quality was lacking, especially speaker phone mode. I actually exchanged my last phone, an HTC Titan for a new one thinking the handset I had was a dud. Turns out, it was worse than the HTC Eris I had years ago. Never had these problem with my 3Gs or Galaxy S II.

I do love HTC phones, but really, they have kind of gone down hill IMHO. I don't recall having these call quality issues with my HTC Touch (WM 6.1) back in the day. Now, I'm suffering through it until I can get the Lumia 900. From all the reviews I've seen, the call quality is nothing short of superb. Never owned a Nokia before, so I'm excited to test out the call quality. I'll also never go back to Android or iOS after using WP 7.5 for the last few months, so my options are unfortunately limited.

RE: Market betterer...
By Jeffk464 on 4/6/2012 8:00:37 PM , Rating: 2
I switched from an HTC incredible to a Samsung nexus and I love the change, but thats partly because of the new technology.

RE: Market betterer...
By sleepeeg3 on 4/8/2012 3:50:34 PM , Rating: 2
Marketing and technology. Samsung has the ace in the hole - their gorgeous Super AMOLED+ screens. They have stolen some of the crApple fanbase with their peer-pressure marketing ads, but also won attention from reviewers, because of their beautiful screens and technology heavy phones.

HTC has no phone to unify across all three carriers and still nothing comparable to the SGSII on AT&T.

"Well, we didn't have anyone in line that got shot waiting for our system." -- Nintendo of America Vice President Perrin Kaplan

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