Samsung soars, HTC stumbles with 2Q profit forecasts

The smartphone momentum is clearly on the side of Samsung as HTC warns of another tough quarter.

The Galaxy S franchise continues to propel's Samsung's success. Josh Miller/CNET

Samsung Electronics and HTC illustrate the disparity between the haves and have-nots in the smartphone world.

Samsung earlier today said that for the second quarter it expects to post a record 6.5 trillion won ($5.7 billion) to 6.9 trillion won in profit and 46 trillion won ($40 billion) to 48 trillion won in revenue, both up significantly over the year-earlier period.

HTC, meanwhile, said it expects to post a profit of NT$7.4 billion ($247 million) and revenue of NT$91 billion ($30.4 million) for the quarter, with profit falling for the third consecutive time.

The results underscore both the impact and challenges that come from operating in the smartphone market. Alongside Apple, Samsung has proven to be adept at selling smartphones at a rapid clip, dominating the market in total sales while taking its fair share of profits. While Samsung is a massive conglomerate that makes multiple electronic gadgets and components, smartphones have driven its bottom line for a while.

HTC, meanwhile, continues to struggle with its comeback attempt, and is just one of many handset vendors facing competitive pressures. The company has faced several issues, including a temporary ban on its high-end One X and Evo 4G LTE phones in the U.S., as well as stalled sales in Europe.

Unlike Samsung, which also sells televisions, chips, and appliances, HTC is purely focused on mobile devices. The company earlier this year tightened its focus to a few products, and has put much of its resources behind its One line of smartphones. While the One X in particularly has gotten decent buzz, the company has been tripped up by legal issues and overwhelmed by the competitive pressure.

The One X faced some delays getting to the U.S. CNET

HTC had warned last month that its earnings would fall short of expectations. Today, it said revenue would fall 27 percent from a year ago.

Part of the issue is HTC's strategy of targeting high-end smartphone users with its One phones. In this area, the company faces off against Samsung's own Galaxy S3 , which arrived with a tremendous amount of hype and has been a strong seller globally. The Galaxy S3 has started to arrive at the U.S. carriers, where it will be available at every major one. HTC's early efforts with the One phones were focused on T-Mobile and AT&T, with a variant created for Sprint.

Samsung is expecting profit to nearly double from a year ago, with revenue rise 22 percent.

Samsung's performance hasn't been perfect itself. While the Galaxy S3 was already out around the world, it's only now hitting the U.S. On Wednesday, Google pulled the Galaxy Nexus from its Google Play store due to the ban Apple won over Samsung in their ongoing patent litigation battle. Google confirmed that it would be returning next week with Android 4.1, or Jelly Bean.

Still, the success of Samsung has come in the face of continued concerns that demand for consumer electronics, particularly in Europe, is weakening amid economic woes. Companies such as Samsung and Apple have continued to buck the trend.

 

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