As Samsung reports its above-expected quarterly earnings Friday, HTC has reported its first loss.
South Korea’s Samsung Electronics is expecting to profit $9.2 billion to $9.6 billion in this year’s third quarter. On the other hand, Taiwan’s HTC reported a net loss of about $101 million in the third quarter as compared to a year earlier.
Both smartphone giants are struggling in competing with the low-end market where new rivals are really doing well.
Despite the trend today, HTC maintained on producing and marketing high-end models, while rivals like Lenovo, ZTE, and Huawei, which offer low-end phones, are all doing well.
Mark Newman, an analyst at Stanford C. Bernstein, stated in a letter, “Samsung’s diversity of profit streams plus strength and scale in all tiers of smartphones helps them to continue to grow profits.”
Samsung does not only market smartphones, it also markets its top-of-the-line memory chips that they sell to other companies such as Apple which was revealed in a previous report. They also get significant profit from its sale of memory chips.
Analysts believe that Samsung may have also benefitted from the fire that happened in the factory of its rival SK Hynix in Wuxi, China prompting a price hike of memory chips in the market.
Samsung’s fate is inversely proportional to HTC, whose problem continues to go on. However, the digits HTC previously announced was smaller than what have been reported last Friday. HTC’s HTC One, its latest smartphone, wasn’t able to catch up with other high-end smartphones from Samsung and Apple.
“Once you hit any bump in the road, you are essentially derailed. In the phone space, you hit one bad quarter and you are out,” said Horace Dediu, an independent telecommunications analyst in Helsinki, Finland to New York Times.
That explains what had happened to Nokia and Blackberry which only lasted for two years and Motorola which lasted five years. The only smartphone company that was able to make a comeback is South Korea’s LG, which, like Samsung, is also backed up by its other products.
