HTC reports record numbers, sells more phones than RIM

IDG News Service - After reporting sales of 13.2 million smartphones during the third quarter, HTC is now the fourth largest smartphone vendor after having outpaced Research In Motion, according to market research company Canalys.

A diverse product offering, expanded distribution network and growing global brand recognition resulted in HTC's highest-ever quarterly revenue at NT$135.82 billion ($4.54 billion) for the period ending Sept. 30. That is a 79% improvement year-on-year, the company said in a statement on Monday.

At 13.2 million smartphones, shipments increased by 93% year-on-year. For example, in China HTC sold nine times as many phones during the third quarter this year compared to the same period last year. That has helped turn HTC into the fourth largest smartphone vendor, passing RIM by a margin of 1.4 million units in the process, according to Canalys.

"It has seen a lot of success in the Asia-Pacific region, and it is doing very, very well in the U.S. market," said Pete Cunningham, analyst at Canalys.

The company is also closer than ever to Apple and Nokia, which sold 17.07 million and 16.8 million smartphones, respectively.

"It is going to be very competitive. Nokia is probably the vendor that is the most vulnerable from HTC in the short term. Nokia's Symbian volumes will tail off, and its success depends on how fast it can ramp up Windows Phone sales," said Cunningham.

Good products combined with a lot of support from operators have helped HTC increase its shipments volume, according to Cunningham. When an operator wants an Android-based phone, HTC and Samsung, which is the biggest smartphone vendor, are the first port of calls, he said.

To further expand volume, HTC is opening a factory in the beginning of next year, which will help increase the company's total manufacturing capacity to about 40 million phones per year.

Two areas in which the company is currently investing are LTE (Long Term Evolution) technology and entry-level smartphones. An LTE device upgrade cycle will come in 2012 in the U.S. and some advanced markets in Asia, and HTC hopes to take advantage of that. At the same time, it aims to continue to attract first-time smartphone buyers, it said.

"In the long term, we will have a very healthy market in terms of competition and that drives innovation, which is great for end users," said Cunningham.

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