Android Puts HTC on the Map

NEW YORK, (TheStreet) -- Google's (GOOG) Android helped phone maker HTC become the fastest-growing smartphone shop in the third quarter.

While overall mobile phone sales remained flat compared with year-ago levels, the smartphone segment of the market is still hot, logging a 12% annual gain, according to Gartner.

And the trends within the smartphone sector continue to show more of the big shift from stalwarts like Nokia ( NOK) and Motorola ( MOT) to a quickly rising cohort of HTC, Apple ( AAPL) and Research In Motion ( RIMM).

The shift is a familiar one for Nokia, which has been helpless in its attempts to defend its top spot against the popular iPhone, the expanding consumer appeal of BlackBerrys, and now the rise of Android-powered Google phones.

Verizon's Other Droid Phone

Nokia saw modest 4% growth in the past year. But that lagged behind the industry's 12% growth rate, causing the Finnish phone giant to lose 3 percentage points of its share of the market.

The third-quarter tally does not include the debut of Motorola Droid sales.

The Droid started selling at Verizon ( VZ) a week ago. Instead, the numbers reflect Motorola's retreat from the market as the refocused company discontinues its non-Android phone lineup.

HTC, albeit off a very low base, had the biggest gains in the group as the Taiwan tech outfit introduced four new smartphones this year using the Android operating system, a big departure from its days as a Microsoft ( MSFT) Windows shop.

Notably absent in the top-five smartphone list is Palm ( PALM). The Pre phone was introduced by Sprint ( S) this summer, and the consumer response has been tepid and fading, despite price cuts.

And while the third-quarter numbers are interesting, the real showcase is this quarter as every player puts its biggest efforts behind its best phones to cash in on the holiday rush.

Motorola hopes to find a place in the pack with the closely-watched introduction of the Droid phone and the potential pickup in Cliq sales at Deutsche Telekom's ( DT) T-Mobile.

The Android arrival is still in its early stages, but it has already had a measureable impact on smartphone numbers. If the momentum continues, it could make Gartner analyst Ken Dulaney's bold prediction that Android would be the No.2 operating system in 2012 less of a long shot.

-- Written by Scott Moritz in New York.
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