HTC has passed Nokia in market value, the reversal illustrating both the growing appetite for high-end smartphones and the dangers of neglecting that sector.
The changing of ranks is the logical result of both companies' recent trajectories in the smartphone market. As smartphone shipments outpaced the rate of general mobile handset market, HTC stock has tripled over the past year, especially as it has focused its business on feature-rich, high-end Android models.
Meanwhile, competition in the basic feature phone sector, where Nokia leads, has intensified, and the Finnish company has lost ground in the high-end market to Apple and Google's Android phones. Increased pressure in the lower-end of the mobile phone market, where profit margins are thinner, has squeezed the company. As a result, Nokia shares has dropped 19 percent this year.
HTC's growth should continue, driven by its investment in Android handsets. The company is shoring up research and development in its phones, recently acquiring a slate of wireless 4G patents for $75 million as well as French software company Abaxia.
With global smartphone growth projected to climb 50 percent this year and Android becoming the leading operating system, according to research company IDC, HTC is perched to continue its ascent.
Nokia, however, will attempt to climb back into the high-end smartphone race. The company announced in February that it is adopting Microsoft's Windows Phone platform as its primary operating system for phones, helping to cut its $4 billion budget for research and development in its devices division and focus the company on its hardware strengths.
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