HTC Q2 profits soar on the back of Android OS

July 6, 2010: 12:53 PM ET

With Windows Mobile device sales on the decline, HTC more than makes up with Android. The Wall Street Journal points out (subscription required) that HTC posted a profit of $268 million for Q2 2010.  That's up 33% year over year from $202 million in Q2 2009 and the highest HTC has posted since it changed its accounting practices in 2007.  HTC reported $1.88 billion in revenue, $280 million over its estimates for the April/May/June quarter.

HTC also announced sales of 4.5 million phones in April alone.  That's a staggering run rate of 54 million phones a year.

Smartphone sales for the year should be about half of that according to Yuanta Securities analyst Bonnie Chang. She expects HTC's handset shipments to rise to 20 million units this year, almost double the 12 million they sold in 2009. "We expect the strong momentum to continue in the second half of the year as HTC will launch another round of new smartphone models in the third quarter," Ms. Chang told the Wall Street Journal.

Microsoft has faltered in its smartphone strategy of late.  They've put all of their eggs in its upcoming Windows 7 phone product which is due toward the end of this year.  At least in the US, Google's (GOOG) Android  has picked up the slack and then some (see NPD chart below).

HTC makes the very popular Android phones, like the Verizon (VZ) Droid Incredible, Sprint (S) EVO, AT&T (T) Aria,  and the Nexus one which is subsidized by T-Mobile.

T-Mobile also carries the HTC HD2, which is one of the only Windows 6.5 phones gaining any support in the marketplace.

Motorola (MOT) is HTC's biggest competitor in building Android smartphones globally and has a high profile Droid X launch coming this month. Samsung is also going big in Android with a launch of its Galaxy platform on all four major US networks and US Cellular.

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Seth Weintraub
Seth Weintraub

Google went from searching the Web to worming its way into nearly every facet of business and government. Seth Weintraub unveils where the company is going, who it's competing with, who it's about to compete with and how market forces push the company to veer or adhere to its Don't Be Evil motto. For 15 years, Weintraub was a global IT director for a number of companies before becoming a blogger.

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