HTC, one of the top-selling brands in Telstra stores across Australia, has reported a 3.1% profit jump, which is higher than analysts estimated.

Late last year, the company embarked on a major brand expansion program in an effort to take on the likes of Nokia and Sony Erricsson, with observers now claiming that the move is finally starting to pay off.  

HTC, who originally made Windows mobile phones for companies like Dell, began making its own-branded handsets two years ago. Since then the company has become a major force in the market, pushing out several established brands.

In a statement issued last night, the company said that net profit for the three months ended March 31 rose to US$158.7 million. Revenue rose 19% to A$1.2 billion, which is higher than the forecast HTC gave in January.

HTC is the world’s largest maker of smart phones using Microsoft Corp’s operating system, by shipments, and also makes smart phones using Google Inc.’s Android operating system.

According to the Wall Street Journal, analysts had been concerned that HTC’s strategy of selling lower-priced smartphones would narrow the company’s margins, while high marketing expenses to increase brand recognition would pay off only in the long run and weigh on profit in the interim.

HTC Chief Executive, Peter Chou, said last week that the company’s growth in the U.S. market is outpacing other smartphone makers this year.

According to the company’s annual report, HTC shipped 5.5 million to six million smart phones to the U.S. market last year. Mr. Chou said that number is expected to rise this year, though he didn’t say by how much.