Lowered outlook, new Apple fight send HTC shares to 2-yr low

Thu Jun 7, 2012 10:55am IST

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* "Return to glory days" as global player doubtful-analyst

* Apple files new case at International Trade Commission

* HTC will launch Windows 8 phones end-2012 - company source

(Adds HTC comment, details of Apple lawsuit, Microsoft plans)

TAIPEI, June 7 (Reuters) - Shares of HTC (2498.TW) fell to their lowest intraday level in more than two years on Thursday after the smartphone maker warned of lower revenues and was named in a patent lawsuit by rival Apple Inc (AAPL.O).

The world's No.5 smartphone vendor, battling to regain market share from Apple and Samsung (005930.KS), suffered a rapid fall from grace in the second half of 2011 after its phones failed to keep up with iPhones and the Galaxy range.

"The hope for HTC to return to its glory days is getting slimmer and slimmer," said Alex Hu, a vice president of Mega Securities' proprietary trading.

"The best scenario is that it can be a regional player, but not a global leader anymore that can compete with Apple or Samsung," Hu said, adding he had sold all of his HTC stock.

HTC cut its second-quarter revenue target by 13.3 percent on Wednesday, citing lower-than-anticipated sales to Europe and delayed sales in the United States. [ID:nL3E8H66RK]

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GRAPHIC: HTC profit/revenue link.reuters.com/gyj68s

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Adding to the pressure, Apple filed a new enforcement action at the International Trade Commission in Washington, according to a media report late Wednesday, seeking an emergency order that would block imports of HTC's new smartphone and tablet.

Apple said HTC models including the One X, One S, EVO 4G LTE and the Flyer tablet continued to infringe upon its data-detection technology, the report said.

Last month, HTC's sales of two new smartphones, the HTC One X and HTC EVO 4G LTE, were delayed for about two weeks because of a customs inspection requirement stemming from a previous patent dispute with Apple. [ID:nL4E8GG4CU][ID:nL4E8GU00X]

"The U.S. Customs Office has reviewed and approved HTC devices for import into the U.S., as they are in compliance with the ITC's ruling," HTC said in a statement on Thursday in response to Apple's latest filing.

HTC, like most high-tech companies, is involved in various patent lawsuits, including ones filed by Finish rival Nokia (NOK1V.HE) last month at the ITC and in Germany over patents ranging from power management to data encryption technologies. [ID:nL5E8G2F1G]

Separately, HTC was reported to be shut out of the introduction of Microsoft's (MSFT.O) new Windows operating system because the Taiwanese company does not sell enough devices or have ample experience making tablets.

But a company source told Reuters that HTC will release new smartphones using the Windows 8 platform at the end of the year, but the company has no plans to launch any tablets this year. Currently, HTC sells only one tablet model, the HTC Flyer.

"HTC has sold more than 40 million Windows Phones over the last 10 years and we are committed to future versions of Microsoft's Windows Phone platform more than ever," HTC said in a statement.

Microsoft officials declined to comment.

At 0417 GMT, HTC shares had fallen 7 percent, the most allowed in a session, to T$378, its lowest intraday level since at least since May 2010. By contrast, the broader market .TWII rose 0.32 percent.

(Reporting by Faith Hung and Clare Jim in TAIPEI; Additional reporting by Bill Rigby in SEATTLE; Editing by Matt Driskill)

((faith.hung@thomsonreuters.com)(8862 2500 4893)(Reuters Messaging: faith.hung.thomsonreuters.com@thomsonreuters.net)) Keywords: HTC SHARES/

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