[Third quarter smart phone numbers show HTC has taken the top spot in the US market and Samsung is now the world's number one smart phone vendor.]

Palo Alto, Shanghai, Singapore and Reading UK -- Canalys released its Q3 2011 country-level smart phone shipment estimates to clients, revealing that HTC has taken the top spot in the US market. At the same time, a particularly strong performance from Samsung saw it become the world’s number one smart phone vendor. Overall, the worldwide market grew substantially: 49% year-on-year to 120.4 million units.

With phenomenal year-on-year and sequential growth of 252% and 60% respectively, Samsung shipped 27.3 million smart phones under its own brand to capture a 23% share, becoming the number one vendor in APAC, Western Europe and Latin America, ahead of Nokia, Apple and RIM respectively. With well-regarded products, such as the Galaxy S II, and significant marketing campaigns, the vendor registered the second highest quarterly shipment total in the market’s history, behind only Nokia’s Q4 2010 performance. In addition, Samsung shipped an estimated 500,000 units worldwide under the Google and T-Mobile brands.

In the United States, the world’s largest smart phone market, HTC shone in Q3 2011, edging out Apple and Samsung to become the leading vendor. HTC shipped 5.7 million smart phones in the US under its own brand, giving it almost a quarter of the market, as well as an estimated 70,000 units under the T-Mobile brand. ‘However you count it, HTC has become a deserved leader in the US smart phone market,’ said Palo Alto-based Canalys Vice President and Principal Analyst, Chris Jones. ‘This is an awesome achievement for HTC, which has built a premium brand in a highly competitive market in just a few short years. It now has a strong range of 4G Android products, with devices ranged by each of the major carriers, and offers some of the most compelling and differentiated products found on the platform today.’

Samsung pushed Apple into third place in the US market, with shipments of its own-brand devices reaching 4.9 million units. Apple’s US smart phone shipments totaled 4.6 million in the quarter and it was affected around the world by consumers waiting for the launch of the next-generation iPhone.

‘Apple did not stir the usual excitement levels in the industry with the announcement of the iPhone 4S, but that was never likely to dampen volumes, due to pent up demand from the later than expected launch and the addition of Sprint as a third carrier,’ said Jones. ‘Early iPhone 4S sales have shown this is the case, and we expect to see a strong Q4 for Apple.’

‘Next week marks the two-year anniversary of Verizon Wireless’s DROID launch, the tremendously successful family of Android-based smart phones in the United States,’ said Jones. ‘Customers who bought early will see their loyalty tested in the coming weeks as their contracts come to an end.’

After a slow start in 2010, AT& T has over-delivered on the number of Android devices it promised to launch in 2011, including the Impulse 4G, supplied by Huawei but AT& T-branded, sold at an aggressive $30 with a contract to target first-time smart phone buyers. Android holds nearly 70% of the platform share in the United States, compared with 57% worldwide.

RIM had another tough quarter in its largest market, where its volumes declined 58% from a year ago and its US market share slipped from 24% in Q3 2010 to just 9% in Q3 2011. It continues to face unfavorable press there and its volumes have dropped significantly despite a refreshed product line that includes its flagship BlackBerry Bold 9900.

‘RIM’s market share has fallen below 10% for the first time, and the current outlook for it in the US is certainly bleak,’ said UK-based Canalys Senior Analyst, Tim Shepherd. ‘While Apple can for now get away with not having a 4G smart phone, no other vendor in the US can. RIM must deliver a competitive high-end 4G smart phone in early 2012.’

‘The picture for RIM in other parts of the world is clearly more positive. It grew 59% in EMEA and 56% in APAC over a year ago, largely driven by the continued popularity of BBM, its BlackBerry Messenger service. The Middle East and Africa and Southeast Asia were particular bright spots, and while October’s outage, focused on EMEA particularly, has hurt RIM’s reputation for reliability we do not expect it to have a substantial impact and expect a decent Q4 performance there.’

‘But undoubtedly RIM needs to deliver new, fresh, exciting products to the market and increase its pace of innovation and execution if it is going to have any chance of reasserting its position in North America. It badly needs to deliver on its potential with its new BBX platform,’ said Shepherd.

Canalys’ research also revealed huge growth in the smart phone market in mainland China, where shipments in Q3 2011 increased by an impressive 160% on a year ago to 23.2 million units. While maintaining very high growth potential, just over 200,000 fewer smart phones shipped in China than in the United States, leaving it a hair’s breadth away from being the world’s largest smart phone market.

‘The Chinese smart phone market is seeing explosive growth, not least from domestic vendors Huawei and ZTE,’ said Shanghai-based Canalys Research Director for China, Nicole Peng. ‘Both vendors are delivering good-quality, attractive smart phones on the Android platform for both the domestic and foreign markets, and their aggressive pricing strategies are enabling them to ship large volumes. They will continue to be an increasingly disruptive force in the global market in the coming quarters.’

Nokia retained its lead in the Chinese smart phone market, though echoing a picture seen around the world, it lost significant ground. Its share declined from 75% in Q3 2010 to 28% in Q3 2011.

‘Nokia has several tough quarters still ahead of it, even in its traditionally strong markets in APAC, such as China,’ said Peng. ‘The recent announcement of its first two Windows Phone devices, however, gives cause for some optimism, and shows that Nokia can still produce innovative and well-designed products. While China is not on Nokia’s initial list of launch countries for its Lumia products, Canalys understands that the market is a key priority for the vendor and expects to see Nokia Windows Phone devices there in the first half of 2012.’

Apple and Samsung also grew significantly in China this quarter, each enjoying growth of 710% and 805% year-on-year respectively.

[Samsung takes smartphone lead over Apple Q3 but the iPhone 4S is challenging to help Apple re-take the top spot.]Hampshire, UK -- Data from leading mobile analyst firm Juniper Research shows that Samsung has taken the lead over Apple during Q3. 22% of 115 million smartphones shipped were from the Korean giant, compared with Apple's 15%. While Apple continues to find success with its premium iPhone range, its main rival is finding success with handsets at a range of price points. Flagship model, the Galaxy S II has continued the success of the first generation device, while compelling new smartphones including Galaxy Note (5.3" display) are poised to shake-up the market.

Apple about to bite back with Siri

However, with Apple's iPhone 4S selling 4 million in the first three days, Samsung will have to pull-out all the stops to keep the Cupertino, CA-based company from re-taking top spot. Daniel Ashdown, Research Analyst with Juniper Research notes: " While the 4S is essentially an iPhone 4 with hardware upgrades, Siri is going to be a killer app for Apple. And the continuation of the iPhone 4 and 3GS in effect positions the company's handsets at a range of price points, without losing their premium image."

Don't forget HTC, and Nokia stops the rot

Taiwan-based HTC has doubled its shipments year-on-year in Q3 to 13.2 million overtaking Blackberry-maker RIM (11.9 million, down 8% y-o-y). Meanwhile, Nokia's shipments improved q-o-q, after two successive declines. And with the Finnish company's first Windows Phone 7 handset coming out, things may be looking up for Nokia. In Q3 the company shipped 16.8 million smartphones, up slightly from the 16.7 million in Q2.

Spice Group bets big on smart phones

The adversity surrounding the telecom sector over the 2G scam probe may give a few politicians and businessmen sleepless nights, but the Chairman of Spice Group, Mr Bhupendra Kumar Modi begs to differ.

“Businessmen usually like uncertainty they see it as a great business opportunity,” said Mr Modi, in an exclusive chat with Business Line. “I personally feel that there will be consolidation in the sector once the Government unveils the new telecom policy. Maybe six or seven players will be left in the fray,” Mr Modi, who made a fortune by selling his stake in Spice Telecom to Aditya Birla Group-owned Idea Cellular, said.

Nobody knows better about mergers and acquisitions than Mr Modi, the ‘king of joint ventures', as he was popularly known in early 80s. During the pre-liberalisation period when it was mandatory for foreign companies to partner Indian companies, Mr Modi brought home global majors such as Xerox, Olivetti and Telstra. After liberalisation he exited some and retained the exciting ones.

“The next big wave in telecom will be internet and entertainment on mobile,” Mr Modi said .

In India, internet now is largely used for accessing mails and business purposes. “This trend will witness a sea change if we can drop the price point of the smart phones as such the cost of accessing internet on mobile is negligible,” said Mr Modi.

He feels India has a long way to go as less than three per cent of mobile users in India access the Net on mobile while it is 45 per cent in China and 30 per cent in Indonesia.

Net Revolution

Armed with his recent acquisition of Indonesia-based mobile handset maker Nexian and the joint venture with Taiwan-based chip maker MediaTek, Mr Modi targets to revolutionise the way internet is accessed from i2i (Ivory Coast to Indonesia). The India-focused Modi group company, S Mobility, aims to bring trendy handsets for youth along with unlimited entertainment.

S Mobility had tied up with Reliance Communication, Tata Communication and other service providers.

The Group's Singapore-based S i2i will be spearheading Mr Modi's dream across the globe while in India it would be S Mobility that would launch a series of internet-ready handsets with screen size ranging between 2.4 inch and 10 inch. The company has a manufacturing unit at Baddi, Himachal Pradesh.

“The Group has invested Rs 2,000 crore in telecom over the last few years and will invest another $2 billion over the next decade. Our target is to generate revenue of $20 billion over the next 10 years, with India contributing $4 billion,” said Mr Modi.

[HTC delivers record-high quarterly revenue selling 13.2 million smartphones in the quarter--93% more than the same period last year and 9% more than the second quarter of this year.]

Taoyuan, Taiwan -- HTC Corporation (“HTC”, or the “Company”, TWSE: 2498), a global leader in smartphone innovation and design, today announced consolidated results of the Company and its subsidiaries for the third quarter of 2011.

3Q Highlights

*After-tax profit was NT$18.68bn, up 68% year-on-year EPS was ASP was US$344, up 0.6% year-on-year

*Gross profit margin and operating margin were both in line with original guidance at 28.0% and 14.9%, respectively

3Q 2011 Results

HTC’s diverse product offerings, expanded distribution network and growing global brand recognition, have helped the Company deliver a record-high quarterly revenue of NT$135.82bn in the third quarter of 2011, resulting in after-tax earnings of NT$18.68bn and EPS of NT$22.07.

HTC sold 13.2 million smartphones in 3Q 2011: 93% more than the same period last year, and 9% more than the second quarter of this year.

New products launched during 3Q addressed a wide variety of customers and market segments. Co- branded with Beats, HTC Sensation XE and HTC Sensation XL offer a studio-quality experience to consumers. HTC Rhyme bundled a new HTC Sense experience and sleek accessories to create a lifestyle device. The Company expanded its entry-level offerings by launching HTC Explorer into emerging markets, such as India, on the heels of HTC Wildfire’s success. And HTC Titan and HTC Radar were the first smartphones to launch with the new Windows Phone “Mango” platform.

China is one of the most important growth regions for HTC, and China reported top sales growth across all regions this quarter – 9x more than its sales volume in the same period last year. HTC Wildfire has become an iconic, mainstream smartphone in the region, and HTC launched the flagship HTC Sensation into two major operators (China Mobile and China Unicom) networks. Two highly-customized social networking devices – HTC ?? with Sina Weibo and HTC ChaCha with QQ – showed HTC’s strong committment to deepen Chinese comsumers’ experience. The Company aims to capture early brand preference in China, as smartphone penetration is at an early stage.

Operating profit continued to grow from NT$12.40 billion in the same period last year, to NT$20.18 billion this quarter- up 63% year-on-year and 5% quarter-on-quarter - on the back of expansion in operating scale and increased revenue. HTC is focused on driving economic scale to achieve efficient operating leverage and a healthy operating margin level.

“We aim to lead the way as the smartphone market continues to expand and change rapidly,” said Peter Chou, CEO of HTC. “We pride ourselves on anticipating market and consumer needs and addressing them before they are realized. We are growing rapidly and responsibly around the globe and continue to expand our leadership in new areas, such as LTE.”

LTE technology is expected to be the next generation wireless communication technology for high-speed data. Since 2009, HTC has maintained its leadership position in 4G, developing and shipping more 4G devices than any other company. An LTE device upgrade cycle is foreseeable in 2012 in both the United States and some advanced markets in Asia (e.g., Japan, Korea, and Hong Kong). HTC is poised to capture an advantage in this market.

In addition to LTE, HTC has invested in delivering innovation to the entry-level smartphone sector. HTC Wildfire has become one of the Company’s top selling products, and the newly-launched HTC Explorer continues to attract first-time smartphone buyers. The Company is committed to drive innovation, not only with high-end LTE devices, but also to the mass market.

Despite uncertainties in the macro-economic environment, HTC believes in its ability to continue to drive strong growth, and is committed to continue investing in marketing, operations and R& D. Going into fourth quarter this year, HTC’s retail presence in China is expected to expand, totaling up to 2,000 outlets. A new factory in Taoyuan is scheduled to complete beginning of next year, which has the potential to increase capacity by up to 40 million units per year. Last but not least, the Company continues its focus on creating global brand preference and emotional connection with customers.

4Q 2011 Outlook

The Company’s outlook for the fourth quarter of 2011 is as follows:

*4Q revenue expected to be around NT$125 to 135bn, up 20% to 30% year-on-year

*4Q shipment expected to be around 12.0 to 13.0mn units, up 31% to 42% year-on-year

*Gross margin expected to be around 28.0%±0.5% ? Operating margin expected to be in the range of 14.5%±0.5%