Smartphone manufacturer HTC Corp. is considering switching to Samsung’s mobile application processors in a move that may help the local electronics maker extend its market share, industry sources said. 

HTC currently uses Qualcomm processors.

Qualcomm accounts for more than 40 percent of the global application processor market’s entire net profit, followed by Texas Instruments with about 30 percent. Samsung Electronics trails behind them with around 20 percent, according to market researcher Strategy Analytics.

The high royalty fees paid to Qualcomm, along with the perception that Samsung’s application processors, although cruder and behind Qualcomm’s, may be a good fit for lower-end models in the global market, is part of what is fanning speculation about the switch, the sources told The Korea Herald on the condition of anonymity.

HTC Korea said it has no information on the plans of its global headquarters.

HTC is Asia’s No. 2 smartphone maker. It shipped 9.3 million phones in the first three months of this year, up from 3.38 million units a year earlier. HTC’s stock value consequently tripled in the past year.

 “This would be a big issue, something not good for Qualcomm but great for Samsung to get such a promising newbie,” said one industry watcher, declining to be identified.

The Taiwanese company has released a lineup of widely popular smartphones including the Desire and Sensation. Most recently, it launched the EVO 4G smartphone and Flyer 4G tablet, which boast speed of up to three times the current third-generation devices.

Samsung has been avidly seeking to increase its market share in application processors.

Application processors are the “brains” behind smart devices, as their roles are correspondent to that of a CPU for desktop computers.

They are called application processors because they handle the implementation of applications for smartphones and tablets.

The timing would be a morale-boost for Samsung as it is currently stuck in a legal patent battle with top rival Apple Inc.

Previously, Samsung was heavily dependent on Qualcomm processors.

Not only Samsung, but most handset makers here are dependent on the U.S. chipmaker, and all Windows 7 smartphones use Qualcomm chips as the application processor.

By Kim Ji-hyun
(jemmie@heraldcorp.com)