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HTC forecasts stormy future, laments Apple S3 defeat

Disgraced acquisition carpeted for 'holistic evaluation'

Taiwan smartphone maker HTC has written off any hopes for sales growth this quarter citing cooling demand in a weakened global economy and fierce competition from rivals.

At the same time, HTC confirmed it is re-evaluating its acquisition of S3 Graphics from VIA after the graphics biz lost a patent dispute against Apple this week.

HTC already downgraded sales forecasts last month saying it expected Q4 growth of 20 to 30 per cent but late last night cast aside those estimates, warning revenues are likely to be flat with the year-ago period at T$104bn (£2.2bn).

"Due to global macro economic downturn and market competition, the assumptions of 2011 Q4 financial forecast provided earlier are no longer applicable. HTC expects 2011 Q4 revenue to be approximately the same as Q4 last year," it said.

This means that sequentially, sales will be down by around 23 per cent on the T$135.8bn posted in Q3. The management are now touting a return to growth in the first half of 2012.

In other developments, HTC said it was "disappointed" that the US International Trade Commission dismissed S3 Graphics' claim that Apple flouted its patents by using tech the graphics biz owns without permission.

"In light of recent development, HTC will work closely in good faith with VIA Technologies and WTI Investment International to conduct holistic re-evaluation of the S3 Graphics acquisition," HTC revealed.

The two announcements combined saw HTC shares on Taiwan's stock exchange slide by 6.9 per cent to T$560 - the daily limit - as the markets opened. ®

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