As Samsung And HTC Post Vastly Different Financial Results, Can HTC Survive?
There’s little question that Samsung is the globally dominant smartphone manufacturer outside of Apple these days. In fact, to call it anything other than a two-horse race would be putting it mildly. At this point, it looks like LG, Nokia, HTC and the rest of the smaller manufacturers world-wide are just fighting for Samsung and Apple table scraps.
Preliminary results for Samsung quarterly numbers show a profit of $8.1 billion, thanks in some part to sales of 500 handsets every minute. Think about that, 500 phones every…single…minute. Samsung’s business continues to be aided by sales of flagship devices, including the Note II which has seen an uptick in unit shipments to the US. With Apple releasing just one smartphone over the past year, Samsung has hit the market with 37 devices geared toward their regional markets. For its part, HTC released just 18 models, LG 24 and Nokia with 9.
Sales of the Galaxy S III are said to have slipped in the fourth quarter, down to 15 million from 18 million in the third quarter. However, estimated sales of 8 million Galaxy Note II units are said to make up for the decline in S III sales. In fact, it could be the Note II numbers that are the cause of the S III sales drop as customers see the appeal in “phablet” devices. Predictions have Samsung selling 290 million smartphones in 2013, up from 215 million sold in 2012.
All these Samsung numbers are strikingly different from HTC which missed fourth quarter 2012 forecasts as profit dropped 91 percent year-over-year. HTC’s downward spiral has continued since the second half of 2011 when the company hit the high note in its global efforts to compete with Apple. Analyst predictions don’t fare much better for HTC in 2013, even the company hopes a dramatic shift in marketing will help its brand image. HTC’s profit of $34 million is the lowest the company has seen since 2004. It’s clear the company needs to reinvent itself.
“Q1 will be better than Q4 as Q4 was really bad, but full-year speaking, HTC’s EPS might not have bottomed in 2012 if its flagship M7 sales disappoint this year,” said Birdy Lu, analyst of Daiwa Capital Markets.
“The new phone could have a first-mover advantage for one to two months before Samsung launches its Galaxy S4 in April, but in the long run, it’s difficult to beat Samsung’s phones,” said Lu.