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It’s been a nasty week for HTC. First its patent battle with Apple gets thrown out of court and now it forecasts gloomy Q4 trading, citing tougher competition and weak demand. The Taiwanese phone maker predicts revenue will be “largely similar” to the same time last year in a statement that was released Wednesday.

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The latest forecast mean October 31 growth predictions of 20%-30% lift in revenue compared to last year’s $135bn, is now downgraded as much as 15-23%, depending on analyst expectations, HTC said yesterday.

Smartphone shipments were predicted to fall to between 12-13 million in October, although shipment forecasts have not been reset.

This Q4 outlook for HTC is in stark contrast to sensational previous quarter it announced last month, with profit soaring 68% year-on-year to US$624m, while revenues grew 79%.

Handset shipments of the likes of Desire S and Sensation also soared 93% to 13.2m units.

This downgrade is in spite of its recent ascendancy in the smartphone stakes – even beating Apple’s market share in US last quarter.

But this was the only battle HTC has won against rival Apple of late, with one of its two patent cases being thrown out by the US International Trade Commission on Tuesday, deeming its $300m purchase of S3 Graphics virtually futile.

“No violation” against S3 Graphics patents had take place by Apple, the ITC six panel judges ruled. And HTC’s second complaint against Apple is unlikely to result in a finding of any violation, patents expert Florian Mueller now believes.

 

The Sensation maker had hoped the S3 investment would help build a patents artillery against its iPhone foe, who it is currently embroiled in four tit-for-tat legal cases with, which first kicked off last year.

It also said yesterday it would re-evaluate the recent acquisition of the graphics firm in light of the ITC ruling.

HTC’s S3 graphics company had claimed Apple infringed four patents relating to 3D imaging.

Analysts believe HTC’s biggest threats include Apple’s newly released iPhone 4S, as well as Samsung Galaxy S II and soon to be released Nexus. And now Nokia has joined the race with its latest Windows Phone smartphones, the competiton is certainly heating up.

Company shares slid 7 percent on local markets today following the revenue downgrade.

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