Samsung Profits to Hit $5.9 Billion While HTC Continues to Struggle

Samsung continues to reap in the profits with a record $5.9 billion expected for the second quarter of 2012 thanks in large part to sales of the Samsung Galaxy S3. However, in spite of Samsung’s latest milestone, Europe’s debt crisis continues to loom over Samsung. As the largest consumer market for Samsung, the South Korean electronics giant will have an increasingly tough time keeping up their torrid pace.

Meanwhile, HTC continues to falter as they posted a drop in profit for the third consecutive quarter. For Q2 of 2012, their net income plummeted roughly 57-percent year-over-year to NT$7.4 billion.  Despite HTC’s widely praised One series having released earlier this year, sales in Europe were lower than expected and delays in the U.S. due to patent-infringement claims only made things worse.

Citigroup analysts Kevin Chang and Jonathan Gu said, “We expect HTC to continue to see severe ASP and margin pressure and a potential risk of running into operating losses in 2013. HTC is likely to survive in the long term but things are likely to get much worse before they get better.”

With the Samsung Galaxy S3 debuting stateside this month and the new iPhone 5 expected to be released later this year, HTC will have a tough time regaining their foothold in the smartphone market. While it’s too early to go into full blown panic mode, HTC may have to make a radical strategic shift to turn around their woes. Their attempt to target high-end smartphone users with the One series hasn’t been all that successful, and they may need to broaden their scope instead of focusing on a smaller set of products.

[via Reuters, Bloomberg, HTC (PDF)]