However, it is declining in terms of its technological advantage and might be surpassed by other smaller manufacturers since hardware technology is becoming much more available. Gai adds that China is seen by HTC as a key factor in their growth but it might not succeed.
Barclays said that MediaTek, which is a mobile chipmaker in Taiwan, will supply high-tech chips to the Chinese market by quarter three of 2012. This will allow smaller manufacturers to provide improved features and applications on their devices at a low cost.
Aaron Jeng, a Nomura analyst, said that the result would negatively affect the sales of HTC in China and might potentially decrease their market share. Gai added that these low cost chips will let smaller manufacturers to directly compete with HTC.
At present, HTC has a market share of more or less 5 percent in China, which is the biggest smartphone market in the world, and 10 percent of its revenue in the previous year was from there.
In addition to the growing competition against smaller manufacturers, HTC is stressed by top companies Apple and Samsung, both in China and the United States.
In the year 2010, HTC was the number one seller of smartphones powered by Android OS in the US. It got 11.8 percent market share but lost against Samsung this year.
Gai expects this 2012 that HTC will drop its average selling price by 10 percent compared to that of last year, because of stronger competition. Moreover, HTC might be short on earnings in the coming two or three years.