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HTC Drops Out of Top Five Phone Makers


The Taiwanese company is struggling in the shadows of Samsung, Nokia, and Apple.

MINYANVILLE ORIGINGAL The new world order of mobile phones shows that HTC (2498.TW) has dropped out of the top five. Samsung (SSNLF), maintained its lead over Nokia (NOK) and Apple (AAPL) as the world's top mobile phone vendor. Sony Ericsson (SNE) and Research In Motion (RIMM) rounded out the top five, which collectively shipped 34.8 million units in the second quarter of the year according to research firm IDC.

HTC has been struggling. Its second-quarter earnings reported a 57% decline in net profit to $247.7 million. Adding to its woes, it lost $40 million when the cloud gaming service it had invested in, OnLive, restructured. HTC bought into OnLive in February 2011. OnLive wasn't the company's only failed investment. Last year it poured $300 million into the headphone maker Beats Electronics. It sold back half that stake in July.

Meanwhile, in August, it said it would invest $35.4 million in the US software firm Magnet Systems. HTC said, "The investment will bring social, mobile, and cloud capabilities to HTC's portfolio of service offerings to its mobile enterprise customers."

Most of the cash the company has on hand is from sales of Android-based devices although it is expected to announce a Windows Phone 8 phone.

IDC projects Android (GOOG) will remain the most shipped smartphone operating system over the course of the five-year forecast though its share will peak this year. Increasingly, its share and growth will be driven by Samsung sales. This Android stratification will happen even as more devices powered by Google's mobile OS from a wide variety of phone makers enter the market.

"Underpinning the smartphone market is the constantly shifting OS landscape," added Ramon Llamas, senior research analyst with IDC's Mobile Phone Technology and Trends team. "Android will maintain leadership throughout our forecast, while others will gain more mobile operator partnerships (Apple) or currently find themselves in the midst of a major transition (BlackBerry and Windows Phone/Windows Mobile). What remains to be seen is how these different operating systems – as well as others – will define and shape the user experience beyond what we see today in order to attract new customers and encourage replacements."

It remains to be seen whether or not HTC will be able to handle the changes in the industry.
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