Ina Fried

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HTC Warns That Its Holiday Quarter Will Be Less Merry

HTC said on Wednesday that its fourth-quarter earnings may fall short of what it had anticipated.

The Taiwanese cellphone maker, which has been on a rapid growth pace, had expected sales to grow between 20 percent and 30 percent, with gross margins of around 28 percent. It now expects sales will be flat from a year earlier, according to Bloomberg and other reports.

“Due to the global macro-economic downturn and market competition, the assumptions of our prior 2011 Q4 financial forecast are no longer applicable,” the company said in a statement. “HTC expects 2011 Q4 revenue to be approximately the same as Q4 last year. Despite the fact that 2011 Q4 revenue is not what we expected, HTC has strong confidence in its products and operation. We expect that growth will return in 2012 H1.”

It’s the second dose of bad news for HTC shareholders this week. On Monday, the International Trade Commission dismissed a patent claim by S3 Graphics against Apple. HTC had been hoping its acquisition of S3 would bolster its patent position in the company’s ongoing intellectual property war with Apple.

HTC said Wednesday that it is re-evaluating it’s S3 purchase

“HTC had decided to acquire S3 Graphics based on the strong belief that evidences of patent infringement from Apple were clear and ITC ruled in its initial determination that Apple had infringed two patents from S3,” HTC said in a statement to AllThingsD. “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.”

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There’s a lot of attention and PR around Marissa, but their product lineup just kind of blows.

— Om Malik on Bloomberg TV, talking about Yahoo, the September issue of Vogue Magazine, and our overdependence on Google