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HTC in smartphone slump as Samsung flies

Alex Scroxton

An increasingly competitive mobile comms environment, matched with ongoing economic uncertainty, has pushed Taiwanese mobile kit vendor HTC to a 26% slump in unaudited fourth quarter profits, its first quarterly decline in 24 months.

The firm, which was the darling of the smartphone world in 2010 as Android began to become a serious contender in the mobile OS stakes, saw net profit drop to 11.02bn Taiwan dollars (NTD) or £235m, down from NTD18.7bn in Q3 and NTD14.8bn this time last year.

It is understood that HTC's sudden fall from grace is the result of both pressure from sector giant Apple, as well as increased innovation at rivals such as Motorola Mobility and Samsung. Both  have been pouring investment into premium smartphone devices to match or exceed HTC's in terms of technical capability.

Analysts told the Wall Street Journal that the pressure would also be on HTC to demonstrate that it has the mettle to exploit emerging markets as the financial crisis threatens to push back consumer and business spending across Europe. This could be a tall order.

Meanwhile, Samsung this morning posted record profits on the back of the smartphone market. Operating profit surged to 5.2tn Won (£2.89bn), up 73%, as its Galaxy device line proved a hit.

The South Korea-based electronics giant said that its components business was also a strong performer, counting many rivals as customers. It also booked a hefty chunk of change from the sale of its mechanical drive business to Seagate.


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