Telstra’s Favourite Smartphone Maker HTC Facing Grim Future

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One of Telstra’s favourite smartphone makers, HTC, is facing serious problems on several fronts after the Taiwanese manufacturer slashed its second-quarter forecast by 13.3 percent. Shortly before the announcement, Apple lodged a third patent infringement complaint against HTC via the US International Trade Commission, Microsoft is also set to dump the Company.In a major blow, Microsoft sources have said that the smartphone maker is being shut out of the introduction of Microsoft’s Windows 8 OS for smartphones due to concerns at Microsoft that HTC doesn’t sell enough Windows devices or have enough experience making tablets.

The sales downturn has been blamed on weaker-than-expected sales in Europe and delayed shipments of some products in the U.S. caused by its ongoing patent dispute with Apple.

Overnight HTC said that it now expects revenue for the second quarter to be around $3.04 billion, down from a previous forecast of $3.51 billion. This is the second time in three quarters that HTC has cut sales forecasts.
Analysts are also concerned that US sales could be hit after Apple claimed HTC devices infringe on an Apple patent, US Patent No. 5,946,647, which involves the automatic detection of data such as phone numbers, email addresses and URLs.

This is not the first time Apple has accused HTC of violating the patent as, in the past, it resulted in an injunction against HTC Android phones being sold in the USA.

Despite HTC delivering a workaround to avoid violations, the company still encountered obstacles at US customs.

Now Apple is asking the ITC for an emergency proceeding and measures that would block any further infringement. Some of the HTC products targeted by Apple include the One X.

The San Francisco Chronicle claims Microsoft’s decision will keep HTC from participating in the launch of the new Windows OS will hurt the Company.

They claim the Taiwanese company is also facing shortages from chipmaker Qualcomm highlighting the challenge of competing with Apple and Samsung, with the latter launching its new Galaxy S3 in Australia.

“Every consumer knows about Samsung’s Galaxy platform and the iPhone, and you are starting to see consumers coalesce around them,” said Matthew Thornton, an analyst at Avian Securities, who yesterday cut his rating on HTC to “negative.” “Things just get worse from here. It’s a very bleak outlook.”

Microsoft plans to release its next Windows operating system, the first to run on chips with technology from ARM Holdings in September.

Ironically it was HTC who made the first Windows phone and the first Android based phone. In Australia, the HTC Velocity was Telstra’s first 4G phone and the HTC Titan was the first 4G Windows Phone. 

 

Sources said that after Microsoft met with HTC, the Company decided HTC didn’t have the sales volume needed to include them in the roll out of their new Windows platform.

HTC engineers wanted to build a Windows device with a customised home screen that would be distinctive to its devices, as manufacturers are allowed to do with Android, Microsoft refused their request.

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