HTC Takes U.S. Smartphone Industry by Storm

HTC, the Taiwan-based smartphone company, was barely known in the U.S. three years ago. It is now the number one manufacturer of the devices sold in America because of its clever adoption of the Google (NASDAQ: GOOG) Android mobile OS and early installation of hardware for 4G wireless systems.

New data from research company Canalys shows that, “HTC shipped 5.7 million smart phones in the U.S.” in the third quarter of this year. That figure was ahead of Apple’s (NASDAQ: AAPL) 4.6 million and Samsung’s 4.9 million. Research In Motion’s (NASDAQ: RIMM) market share dropped from 24% in the third quarter of 2010 to 9% in the most recent period.

HTC’s success should be a warning to Apple, which still shows no sign it will release a new iPhone that works on superfast 4G systems. Apple has decided to rely on new software and hardware advances that make its 3G smartphone more well-featured than the competition. This includes voice recognition software Siri, which comes installed on the new iPhone 4S. The strength of new features for the wildly successful Apple smartphone may not be enough to keep sales strong next year as more wireless subscribers turn to 4G.

HTC has moved to the front of the smartphone market because it was willing to take a risk. It is worth noting that Apple usually is considered the smartphone firm most likely to offer new features that the public does not expect or even knows it wants. HTC may have taken a page from that book.

AT&T (NYSE: T), Verizon Wireless, and Sprint-Nextel (NYSE: S) have turned to 4G as the new battleground for wireless subscriber market share. HTC has been clever enough to anticipate that, and its prescience has paid off.

Douglas A. McIntyre