The handset maker on Wednesday lowered its second-quarter revenues forecast by 13.3 percent to NT$91 billion (US$3.03 billion). The lowered guidance includes a one-time charge of NT$2.6 billion to help it clear its channel inventory for certain products shipped from last year, HTC said. Consolidated sales for May were NT$30 billion, down 26.13 percent from the previous year.
HTC blamed the guidance dip on lower than anticipated sales to Europe and the delayed shipment and launch of certain products in the U.S., meaning the HTC One X and HTC EVO 4G LTE, which were pushed back two weeks owing to customs inspections required after losing a patent suit to Apple Inc. (Nasdaq: AAPL).
HTC also confirmed Wednesday that Nokia Corp. (NYSE: NOK) has filed a patent-infringement investigation against it with the U.S. International Trade Commission (USITC) , but the company didn't comment on the legal proceedings.
Why this matters
This is the second missed mark for HTC this year. The Taiwanese company lowered guidance on the first quarter too, admitting that its Long Term Evolution (LTE) handsets weren't the big sellers it'd hope they'd be yet. (See HTC: LTE Handsets Disappoint and OS Watch: HTC's Revenue Release.)
Trouble in court is certainly a big drain on its budget, but competition from other Android phones hasn't helped either. While HTC struggles, Samsung Corp. and Apple continue to dominate the smartphone market. Canaccord Capital Corp. says that the pair will consistently combine for more than half of smartphone unit sales for the remainder of this year and next. As of May 1, Samsung and Apple made up 47.6 percent of smartphone sales, but the two earned 99 percent of industry operating profits.
HTC's name used to be lumped in that winners category, but it appears to be joining the legions of other struggling smartphone makers like LG Electronics Inc. (London: LGLD; Korea: 6657.KS) , Nokia and BlackBerry . Upcoming launches, like its HTC One X with AT&T Inc. (NYSE: T) should help the company, but it'll continue to be a challenging road ahead. (See AT&T Offers HTC's One X LTE.)
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— Sarah Reedy, Senior Reporter, Light Reading Mobile