HTC is bigger than Nokia

Such would not had been easily comprehended a few years ago. How can a giant like Nokia be smaller than a tiny Taiwanese handset manufacturer (HTC) who had almost negligible market share. As of today, HTC's market capitalisation had over taken global handset market leader Nokia, in a development that was seen to reflect HTC’s strength in the booming smartphone sector where Nokia is losing ground rapidly according to Bloomberg.

A 5.3% increase in HTC’s share price yesterday took its value to US$33.8 billion, ahead of Nokia’s US$33.6 billion. The value of HTC’s shares have tripled in the past year, as its smartphone growth outpaced the market, while Nokia has seen its value slide with a significant drop-off after it announcement of its alliance with Microsoft in February 2011.

While Nokia is still the bigger of the two in terms of operating profits and revenue, it is expected that Nokia will struggle from its current Symbian OS platform to Windows Phone, a process that is expected to take several years.

The bulk of Nokia’s volumes also come from low price, low margin devices, which means its operating margin is pressured. In contrast, HTC is focused on the more lucrative premium device sector, without the burdens associated with delivering a mass-market handset portfolio meaning it has healthier operating margins.

The position for Nokia is just going to get worst before it gets better. The road ahead is definitely going to be more than just bumpy.