Microsoft has cut HTC out of its eagerly anticipated Windows RT software introduction, according to sources - delivering a hammer blow to the struggling company.
Supplying handsets compatible with the new Windows software will provide a crucial sales boon for manufacturers, and exclusion for HTC cuts another source of revenue for a company already sweating over its finances.
HTC has reduced its second-quarter sales forecast by 13 per cent, highlighting the increased marginalisation of peripheral manufacturers. With huge fanfare surrounding every move of giants Samsung and Apple, and customers flocking to buy their flagship smartphones, the marketplace is proving cruel for the likes of HTC.
And the news of Microsoft's snub, reported by sources close to Bloomberg, has commentators painting a bleak picture for the company.
"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 LLC, who yesterday cut his rating on HTC to negative. "Things just get worse from here. It's a very bleak outlook".