HTC Shares Tailspin Following Forecast Cut

Taiwanese handset manufacturer HTC suffered a significant setback after having surprisingly cut its growth forecast from around 30 per cent to nearly zero.

The company said that revenues for the last quarter of 2011 are expected to remain unchanged compared to one year before. This announcement caused its shares to fall by seven per cent and cast serious doubts over the long term growth prospects of the business.

HTC, which is the fourth biggest smartphone brand after Apple, Samsung and Nokia, said that the downgrade was due to the double whammy of fiercer competition and weakening demand.

A third reason could be factored in as well; despite the fact that HTC has announced a slew of new products since the beginning of the year, many of those were mere variations of existing ones, which may have led to product fatigue.

HTC's tablets, the Puccini and the Flyer, haven't had the expected impact due mainly to the pricing strategy and increased competition.

There are rumours that HTC will also be launching a Chromebook in 2012 in a bid to expand its portfolio beyond smartphones and tablets. The arrival of Windows 8 for ARM in the second half of 2012 might clear things up though.