In the Smartphone-Centric Future, Will HTC Beat Nokia?

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A startling U.K. survey has revealed that smartphones have over 73% of the U.K. contract cell phone market. Combined with news that famed smartphone maker HTC is selling own-brand units, the writing's on the wall for dumb phones. 

The survey data comes from GFK Retail and Technology, and though it highlights Android phones in particular (which have seen dramatic growth from 3% of the U.K.'s mobile market in Q1 2010 to over 13% in Q2) the real message is the overall market dominance of smartphones over dumb- or feature-phones. In June of this year, the U.K.'s market had a 73.5% smartphone share, up from 55% in the first quarter of the year. Given that smartphones typically have higher prices than dumbphones, this is an interesting measure of how the cell phone market is changing in terms of consumer spend.

But it's also a sign of how dramatically the market has been influenced by the iPhone, and that Nokia really, really needs to very quickly reinvent its entire market strategy if it's to turn around its lagging business--remember its recent finances, while carrying some positive spin, emphasized that the company's completely missed its targets on the top end of the market, where smartphones sit.

Nokia's got some interesting new competition too. Possibly ready to make the most of some relaxed rules about investments and business opportunities outside of China, famed smartphone manufacturer HTC (behind many original Windows Mobile smartphones of yesteryear, newer Android phones of today, and Windows 7 series devices in the future) has revealed it'll be selling smartphones under its own brand. The first clutch appear to be aimed at the Chinese market, and borrow design cues from devices HTC's already building for other folks, but the company will almost launch more unique units of its own if the early ones prove a success.

Is HTC Nokia's new and biggest threat? It's very possible. The company's displayed remarkable agility, and unlike Nokia's poor decision to abide by many of its own (aging) operating systems, HTC will be able to produce Android or Windows 7 phones as it chooses--even applying its own smart UI frills on the top as it sees fit. Assuming HTC can ramp-up production, develop a market-grabbing system, and avoid the sort of manufacturing problems that have influenced Apple's Chinese provider Foxconn, its future looks pretty bright.

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