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Samsung drives HTC out of South Korea as sources warn of further European closures

HTC has confirmed that it will shut down operations in South Korea, home to smartphone giants Samsung.

"As part of a regular review of all lines of business and markets in which the company operates, HTC will close its Korea sales office with immediate effect," an HTC spokesman said in a statement.

The phone maker said it will continue to provide sales and customer support through local operator partners like SK Telecom and KT, honour existing product warranties, and "endeavour to provide updates to existing products."

"HTC believes Korea is one of the most advanced and fast growing smartphone markets in the world, and will carefully evaluate introducing innovative mobile devices in Korea should the opportunity arise in future," HTC concluded.

When ITProPortal contacted a source close to the matter, there were warnings that HTC could well be shutting down a string of other international HQs. "Beyond the Korean office, HTC is apparently planning on closing several European offices," we were told. But the source could not identify which locations would be affected.

Despite the recent introduction of its well-received One series of smartphones, HTC has struggled to compete against Samsung, which has its headquarters in South Korea. The popular Galaxy lineup of devices helped Samsung top Nokia in mobile phone sales this year for the first time in 14 years, while the company recently doubled its lead over Apple in global smartphone sales.

According to stats released last week by IDC, HTC was the number four smartphone vendor in the world during the second quarter behind Samsung, Apple, and Nokia. It shipped 8.8 million devices for 5.7 per cent of the smartphone market, which was down from 10.7 per cent during the same time period last year.

Still, IDC said that HTC "rebounded" from the two previous quarters, when its results were more dismal. "Its relatively strong performance in the Asia/Pacific region allowed it to climb back up the rank order as did the correction of its channel inventory issues," IDC said. "The company's streamlined portfolio means future share gains will be predicated upon the success of its One products."

Beats Audio recently bought back half of HTC's shares in the company to give itself a 75 per cent ownership instead of a 50/50 split with HTC.