Taiwan's HTC on Friday overturned positive expectations and said it now believes its revenue will decline by a small single digit percentage this year. It had previously expected revenue to climb by 10 percent but changed its view after a lack of large-scale orders, phone delays and poor sales in its key Chinese market. The revised forecast shows HTC's once-rapid growth stunting as it had grown 29 percent in 2008.
Although the company didn't mention specific competitors, the sales slumps are attributed by Yuanta Securities analyst Vincent Chen to much fiercer opposition in the smartphone business. Outside of its own operating system market, HTC's most evident competitor is the iPhone, which became much more threatening with the launch of the iPhone 3GS in mid-year.
An additional and still important risk may also come from rivals' Android phones. While HTC has largely had the Android device market to itself with the Dream, Hero and Magic, devices like the Samsung Galaxy and future Acer phones mean it will no longer be the only company providing Android phones. That reduces the average price of an HTC-made Android phone as it now has to compete on more even terms, according to Chen.
In spite of being previously known as one of the primary suppliers of Windows Mobile phones, HTC is rumored planning to base most of its line on Google's platform instead of Microsoft's. Android is much more directly suited to touchscreens and has significantly more modern web browsing and medeia playback.