UPDATED 17:15 EDT / JUNE 06 2012

The Outlook for HTC Continues to Decline

It may be summer in the US, but things are not looking so sunny for HTC. The mobile maker has amended its second quarter sales projections due to lower than expected demand for its devices within the US and Europe. The company has been working to regain market share, but a ban on US imports of the company’s new phones and tablets driven by Apple’s claims of patent violations isn’t making that easy.

HTC stated via a press release, that its revised second quarter sales will be $3.05 billion, a 13.33 percent decrease of 13.33 percent from its forecast of $3.51 billion due to “lower than anticipated sales to Europe, and the delayed shipment and launch of certain products in the US.”

HTC also revealed that the lower forecast numbers include an $86.9 million charge it is taking to clear unsold inventory from last year. One of the biggest issues was ban of HTC’s new One X and Evo 4G Android smartphones in the US on April 19. The US International Trade Commission ruled HTC had infringed on patent 5,946,647, a “system and method for performing an action on a structure in computer-generated data.” held by Apple. The ban has been lifted, but the damage to sales was already done. This is not the first financial trouble for HTC. The company also had a dismal first quarter, but expected to rebound from sales of its One product line.

HTC is not the only mobile maker struggling. Research in Motion continues its decent into oblivion and Nokia has shown disappointing performance. Shares of Blackberry maker Research in Motion dipped below $10 per share this week, after the company forecast an operating loss and said it has hired backs to explore strategic options. Everyone projects that things are just going to keep getting worse for Research in Motion.

Things are looking much better for Nokia. A recent poll on Reuters shows analysts expect the company to bleed $2.5 billion in cash over the next three quarters. Unfortunately, this is a repeat of what has occurred for the last five quarters – the company managed to burn through $2.1 billion of its cash reserves as sales of its Lumia smart phone failed to impress. The big problem for Nokia is that the core of its business,  cheap feature phones,  is dying  because customers can purchase cheap Android phones. Perhaps, HTC should make some of those and pick up Nokia’s former customers.


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