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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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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.


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