HTC feels the heat from Apple, Samsung

Facing a struggling economy and increased competition from Samsung and Apple, HTC cut its sales forecast by nearly 23 percent. The company is also reevaluating its purchase of S3 Graphics.

HTC cut its sales forecast and said that its quarter-to-quarter sales will slow for the first time in two years. In the United States at least, HTC has a strong holiday lineup of phones including the Rezound, Amaze 4G and more but Apple and Samsung are not going to make things easy over the next few months.

HTC also said that it could drop its plan to purchase S3 for about $300 million. We were a bit puzzled when the move was announced but it’s clear that the deal would have been partially a patent play against companies like Apple. Now that S3 has lost a patent-infringement case against Apple, the deal may not be worth if for HTC.

This isn’t great news for HTC but it’s also not horrible, as the company is still doing gangbusters in the smartphone market, particularly in the United States. It could spell some trouble long-term though, as it will have to push into the low-end in markets like China and India, as well as continue to delight the premium high-end with devices like the rumored quad-core phone.

[Via Bloomberg, photo]

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