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HTC profit soars on 13.2 million handset shipments

The mobile company says that its profit is up 68 percent compared to the year-earlier period, and handset shipments are up 93 percent.

HTC's smartphone growth has been quite impressive.
HTC's smartphone growth has been quite impressive.

HTC's financial performance improved greatly in the third quarter, thanks to massive growth in handset shipments.

During the period, HTC generated nearly NT$136 billion (US$4.5 billion) in revenue, jumping 79 percent over the same period last year. HTC's after-tax profit hit $624 million, representing a 68 percent gain year-over-year.

According to HTC, which announced its earnings today, it shipped 13.2 million handsets worldwide, up 93 percent year over year.

HTC's third-quarter success follows similarly impressive growth in handset shipments from its top competitors, Apple and Samsung.

Last week, Samsung announced that its smartphone shipments jumped more than 300 percent compared to the third quarter of 2010. That success helped Samsung nab 23.8 percent of the smartphone space during the period, according to research firm Strategy Analytics. Apple's iPhone captured 14.6 percent of the market.

Market share is just part of the story. Earlier this year, research firm Gartner said that over 296 million smartphones shipped worldwide in 2010 and that it expects that figure to jump to 468 million this year. In 2015, Gartner predicted, 1.1 billion smartphones will hit store shelves.

That kind of growth should benefit all three companies--and other smartphone vendors--regardless of how much market ownership they have now or later.

Looking ahead, HTC expects to capitalize on the continued success of the smartphone market. The company says that in the fourth quarter, it will ship between 12 million and 13 million handsets worldwide, representing 31 percent and 42 percent growth, respectively, over the same period last year. It hopes to post year-over-year revenue growth of between 20 percent and 30 percent in the fourth quarter.

But HTC could face a challenge in the fourth quarter from, among other competitors, Apple's new iPhone 4S, which went on sale at the beginning of October--and among a wider array of carriers in the U.S., now including Sprint.

HTC acknowledged the fourth-quarter uncertainties but voiced optimism for the first quarter of 2012, with the arrival of 4G LTE phones, according to Reuters. The company also said it has no plans to offer phones priced below $100. "We hope to capture the opportunities from customers migrating from feature phones to smartphones with our quality," HTC CFO Winston Yung said in a conference call, as reported by Reuters. "That's something we won't compromise, we cannot launch low-end products."

Update at 5:44 a.m. PT to include fourth-quarter outlook.