HTC Profits: 2011

It is hard to believe that HTC is having a rough year. After all, it seems like nearly every other day on Android Central a new phone of theirs is being released. Still, while they've shipped 25 million phones this year and their name is now well known, Samsung and Motorola have been grabbing the spotlight too, resulting in a less-than-stellar quarter in profits for smartphone manufacture. They're banking on a better year in 2012 where they estimate they'll ship 45 million phones and have some new "flagship" Android devices--devices which we already thought existed.

So why the sudden downturn? Over at PaidContent, they suggest two reasons:

  1. They're betting a lot on Android. With its cutthroat competition in Android hardware, banking on the lil' robot has high rewards as well as high risks. If you're a hit with consumers, you win big. But if you don't have a "killer device" that year, you can flounder. This is why Nokia went with Windows Phone--the competition was less one-upmanship and they could really stake their ground instead of being just another player.
  2. Patent costs. While Android once promised to be the "free OS" for OEMs in which they could reap pure profit, it turns out a lot customization to the OS by HTC in addition to the patent costs (due to Microsoft gaining licensing agreements with them) has hit their bottom line.

Of course this doesn't mean that Windows Phone will be their savior either, as our market share is still tiny. But perhaps if HTC starts putting more resources into that camp and growing the market, they could hedge off any looming Nokia threat. And yes, HTC should be very concerned with a looming Nokia, especially in the U.S. come 2012.

Source: PaidContent/Yahoo! Finance