Posted by
alfredlester on Tuesday, July 06, 2010 5:00:17 PM
HTC released its preliminary second-quarter earnings on Tuesday. The Taiwanese handset maker posted $268 million in profits, a 33 percent increase over the year-ago period. That&&9;s the largest quarterly profit ever for the high-growth device manufacturer.
HTC is the largest purveyor of Windows mobile phones, as well as the leader in the Android segment. And it was Android that pushed HTC&&9;s sales through the roof in the second quarter with nearly 60 percent year-over-year revenue growth.
HTC sold 4.5 million devices in April. Analysts expect the company to sell about 20 million units this year. HTC sold 12 million units in 2009.
HTC&&9;s Early Mover Advantage
What sets HTC apart from other handset vendors that rely on Google&&9;s Android operating system to power their devices? Several characteristics, according to Michael Gartenberg, a partner at Altimeter Group.
"HTC got on board early. They&&9;ve had more than a decade of experience in the smartphone category. They built some of the first Windows smartphones; the first smartphones that were out on the market," Gartenberg said.
"HTC also quickly understood what some of the Android limitations were and built HTC Sense to overcome some of those limitations from a user-interface perspective. Learning the lessons that come from making smartphones for so long has certainly helped HTC."
An Android Leader
HTC has several Android hits on its hands, including the Droid Incredible on the Verizon Wireless network, the EVO 4G on the Sprint Nextel network, the Aria on AT&T, and, to a lesser extent, the Google Nexus One on T-Mobile infrared heaters.
Should other handset makers that have embraced Android expect similar profit increases for the second quarter? Probably not on the back of Android. HTC has had some of the hottest Android devices on the market, as well as Android diversity.
"HTC has sold Android devices in the U.S. and Europe. They&&9;ve sold phones at the high and low end of the spectrum. And they&&9;ve become synonymous in many ways with Android development and the leader of Android development," Gartenberg said. "It&&9;s no surprise that Android has done well for HTC. Other handset makers won&&9;t necessarily see the same pickup that HTC has had just because they are doing Android."
No &&9;Flash in the Pan&&9;
Next question: Has HTC cornered the market for cool Android phones? Not quite. Motorola sold plenty of Droids, and its successor, the Droid X, has been well received. The market is moving too quickly to declare that one company has cornered the market.
"What it comes down to is Android is not a flash in the pan. It&&9;s not a passing fad and we are going to see more and more of these devices coming to market," Gartenberg said. "But with so many coming to market, the question is how many of them are going to be able to stand out the way HTC&&9;s have?"
Android Powers HTC's Sales To Record Q2 Profit