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the global macro-economic downturn and market competition, the assumptions of our prior 2011 Q4 financial forecast are no longer applicable,” the company said in a statement.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.”

“Notice is hereby given that the U.S. International Trade Commission has determined that no violation of section 337 of the Tariff Act of 1930 (19 U.S.C. § 1337) has been shown in the above-captioned investigation and that the investigation is terminated,” according to the ruling, which was posted by the Web site FOSS Patents.

Taiwanese cellphone maker HTC had scooped up S3 in hopes of strengthening its patent position against Apple, which has its own complaint against HTC before the U.S. trade body. A ruling in that case is expected next month, FOSS Patents said.

In a statement to AllThingsD, HTC said it was disappointed: “While the outcome is not what we hoped for, we will review the ruling once the commission provides it and will then consider all options, including appeal.”

The ITC had previously narrowed the scope of HTC’s case against Apple with regards to the S3 patents. HTC said that the ITC last week launched a new investigation based on a separate patent complaint filed by S3.

The battle between HTC and Apple is just one of many skirmishes dotting the mobile landscape, a battlefield that includes disputes between Oracle and Google, and Microsoft and Motorola, to name just a few.

HTC’s suit claims that a range of Apple products infringe on three of its patents, including iPods, iPhones, iPads and Macs, according to Reuters.

Neither Apple nor HTC representatives were immediately available for comment.

It’s the latest move in a continuing spat between the Taiwanese cellphone maker and Apple. Apple first sued HTC back in March of last year, accusing HTC of infringing on 20 of its patents.

The U.S. International Trade Commission last month found that HTC is infringing on two of Apple’s patents.

Though HTC is the company named on Apple’s court documents, it is clear Apple also has all of Android in its crosshairs, with many of its complaints related to the way Google’s operating system works.

HTC, being a younger company than other vendors like Samsung and Motorola, however, has had less in the patent realm to defend itself. The company recently scooped up graphics chipmaker S3 from Via, in large part to gain that company’s patent holdings. The company has also suggested it is open to some sort of deal with Apple.

And of course, in the granddaddy of patent-related acquisitions, Google announced on Monday it plans to spend $12.5 billion to acquire Motorola Mobility.

The Apple-HTC spat is just one of many patent fights taking place in the wireless industry. Apple is also suing Samsung, while Microsoft is engaged in legal fights with Motorola and Barnes & Noble, and Oracle is suing Google.

A U.S. International Trade Commission judge has ruled that some of Apple’s Mac computers do infringe two of the four patents S3 asserted against the company. But it also ruled that Apple’s iOS devices do not and that Macs running Nvidia GPUs have an implied license to use them.

In other words, the iPhone and iPad are no longer at risk for an importation ban if things go sideways for Apple in this case. And neither are any Macs protected by that implied license I mentioned earlier. Really the only infringing products at issue in the case are Macs with Intel GPUs. So, worst case scenario, if the ITC’s initial ruling should be upheld, Apple could presumably switch its Mac line over to Nvdia GPUs and dodge an ITC ban. Which significantly blunts S3′s helpfulness to HTC in its ongoing IP war with Apple, as Litigating Apple’s Matt Macari suggested last week.

“As S3 goes, so goes HTC — at least when it comes to using the S3 acquisition as leverage against Apple,” Macari, an IP attorney, wrote. “Such a turn in events would effectively put HTC back where it was before it purchased S3, forcing HTC to face Apple’s initial ITC win head on.”

The patents could aid HTC, which is in the middle of a legal battle with Apple. It’s the latest in a string of moves in the mobile industry as key players look to bolster their intellectual property position in what has become a very litigious market.

The biggest prize in recent memory — the patent holdings of bankrupt Nortel Networks — was sold last week to a consortium of companies including Apple, Microsoft, Research In Motion and others. Their $4.5 billion winning bid kept the collection of 6,000 patents out of the hands of Google.

The S3 deal is expected to close before the end of the year, Via said.

“The transaction would allow Via to monetize a portion of its rich IP portfolio, yet retain its graphics capabilities to support the development and sale of its processors and chipsets,” Senior VP Tzu-Mu Lin said in a statement.

Meanwhile, elsewhere in the patent litigation world, Microsoft continues to convince some of the folks selling Android devices to pay for a license to Microsoft’s mobile patents. In the past week, Redmond has separately announced four deals with smaller Android product makers. A pact with Wistron was announced on Tuesday, while last week the company announced agreements with Onkyo, Velocity Micro and General Dynamics Itronix.

HTC, which makes both Android and Windows Phone-based devices, was the first big name company to announce an Android-related licensing deal with Microsoft, in a pact announced last year.

Yesterday, BoomTown asked a question on Twitter about what grade people thought I should give Yahoo CEO Carol Bartz for product innovation.

I began handing out marks to Bartz last week, after she gave herself a B- for overall performance for the year since she took over the troubled Internet giant.

But I decided to be more specific, splitting the grades for Yahoo (YHOO) in 2009 into five categories: Management, financials, product innovation, deal-making and moxie.

So far, I have given her an A- for management and a C+ for financials.

But I resorted to the lazy reporter trick of using Twitter, because I was torn when it comes to product innovation.

One main reason: Bartz inherited a company that has been suffering from a serious and chronic case of product constipation, after many years of leading the Web in new and innovative offerings.

In fact, from its amazing content products to its early attempts at personalization to its way-ahead-of-the-pack email to its cool design breakthroughs, Yahoo had always been the one to beat when it comes to the consumer Internet in Silicon Valley.

But that has decidedly not been the case for many years now, even as other key players have been very busy inventing some cool stuff.

Consider: Facebook with The Wall, News Feed, pokes and friending; Google (GOOG) with Chrome, Android and a plethora of major search innovations; Amazon (AMZN) with Kindle, Prime, EC2, S3; Twitter (the whole dang idea of it); and Apple (AAPL) with the iPod, the iPhone and, soon, the iPad–have you heard of them?

And–yes–even Microsoft has jumped in with a saucy new Bing search service in 2009, and it has been introducing features regularly, despite its weensie market share.

Product innovation also includes keeping a sharp eye out for new companies to snap up, and Yahoo used to do that, grabbing innovative start-ups, such as Flickr, Del.icio.us and many others.

But Yahoo made both of those purchases in 2005, and the entrepreneurs from those start-ups have since exited under a cloud.

In 2009, Yahoo made a few minor acquisitions, focusing instead on shedding and closing down former purchases it could not successfully integrate.

That kind of cleaning up is doubtlessly a good thing for Yahoo, and I did not think it completely fair to ding Bartz for a situation that obviously requires a lot of fixing, made even harder since there have been a lot of other issues to deal with at the company.

Nonetheless, as the year ticked on and other Web players marched ahead with all due speed into a range of new arenas, it has become increasingly worrisome to hear not a peep out of Yahoo or see any true spark of innovation, even as Bartz hired a passel of new execs, most of whom have more enterprise than consumer Internet experience.

While Yahoo did complete a significant overhaul of its homepage and launch a new marketing push, competitors such as AOL (AOL) and Microsoft did much the same.

As to the variety of key fixes across the site that should happen as a matter of course at any company, all of which were necessary–that’s great. But while Yahoo is in the midst of a brand revitalization, it simply does not get credit for keeping its existing properties properly updated.

Thus, my grade comes down to a C- in product innovation, since I cannot point to a single unique and striking innovation from Yahoo in 2009. Neither can I call its two very decent acquisitions–photo organization start-up Xoopit and Arab Internet portal Maktoob–game-changing in any way whatsoever.

My grade is better than the dozens of suggestions I got from readers in tweets, direct messages and emails, most of which rated Yahoo’s innovations effort of late at a D or D- grade (with one F–Hello, Keith R!).

Wrote one smart techie I know well, in a typical sentiment:

I’ll give them a D for product innovation. They have outsourced search to Microsoft. They made so many small, smart acquisitions over the years, but they killed them first and now looking to divest every one of them. They want to get into the social game, but have had Delicious, MyBlogLog, Upcoming for all these years and did nothing with it. They incubated Y! Pipes, same result.

And now their big game is social activity aggregation. They have the right assets–mail and messenger are still popular, news is still popular and they just renewed their deal with AP, users are still on Flickr, don’t agree with their home page strategy but with that and the Facebook Connect integration, Y! has the potential to know a lot about a user. They’d then be able sell targeted display ads for a premium, that Facebook has been (so far) reluctant to do. We’ll see how well they execute this year. I’m not very hopeful though. They have lost their product DNA.

We’ll have to see about that in 2010.

And, to be fair, Yahoo PR exec Sheila Tran respectfully disagreed with my assessment and sent me a cogent and well-argued email about how Yahoo did a lot better in this area than you might think, awarding it an A.

Here is her email in its entirety, so judge for yourself:

High-level Points

· Product innovation is not just about launching “new” products. We focused on continually innovating on our core/leading products/properties.
· Making these updates are key to our brand revitalization and core to our success moving forward.
· Other competitors may have updated some similar products this year but they don’t have the reach and leadership we have. Our updates in several areas such as the homepage, search, mail, mobile and messenger were differentiated from others.
· We have innovations that span across the consumer AND advertising experiences
· We’re focused on innovating globally ie launch of Meme

Product/Property

New Homepage

· In the US, we’ve seen a 12% year over year increase in UU’s on our homepage (Dec 08-09, comScore).
· The web is open and in 2009, Yahoo!’s homepage opened up, too. With the integration of the Yahoo! Application Platform and the new homepage (September 2009), we gave developers the ability to get in front of one of the largest daily audiences on the web.
· The new homepage takes the number of codebases from 33 to 1. The benefits of moving towards a single code base are many–faster time to market, less duplication of efforts, and a more robust technology platform to operate from, to name just a few.
· We expanded the use of our content optimization technology to the Today module, helping fill the page with more relevant and engaging content. While this isn’t always apparent to users, our content optimization algorithms work behind the scenes to help us fine-tune how we identify and display the most popular content. We are now testing how we can use the engine to help us personalize content to peoples’ interests–for example, if you’re a sports junkie we might increase the amount of sports news you see when you visit the Yahoo! homepage.

Mail
· Launch of open apps which is aligned with what we have done across the homepage and search.

Messenger
· Yahoo! Messenger has seen video instant messaging minute use grow 3x since its introduction last year.

Search
· Launch of SearchPad: online personal research assistance when people search. Only one that offers this
· Continued success with SearchMonkey and BOSS which resulted in a differentiated search experience on Yahoo! Search and outside of Yahoo!
. BOSS: more than 30 million queries a day
. SearchMonkey: live in more than 23 markets, more than 70 million enhanced searchmonkey results are viewed daily
· Launch of the new search results page: open apps, blended results, 3 column look and feel which google then announced, enhanced results with search monkey
· Launch of video and image search refiners: no other competitor has taken our approach which really provides a more relevant experiences for people.

Artist Pages
· Launch of the artist pages consumer experience that aggregates the best music products, services, information, and content the Web has to offer about more than 500,000 artists. Pulls together “best of the Web” music products such as iTunes, Amazon.com, Last.fm, Rhapsody, Pandora and others in one place.

Connected TV
· In 2009, Yahoo! revolutionized the TV experience by making the connection between TV viewing and the Internet a reality and signing distribution partnerships to embedding the Yahoo! Widget Engine directly in TVs from Samsung, Sony, LG and Vizio.
· In 2010, we continue to expand partner distribution globally (new partnerships with Hisense, MIPS, Viewsonic and Sigma), and move beyond the TV (into set top boxes, blu-ray players and more.) We also opened the WDK and introduced new Widgets providing users with thousands of content channels.

Mobile
· New Y! Mobile Homepage–33 countries across 1,900 devices; tighter PC to mobile synergies (http://m.yahoo.com)
. Over the past two years, we have seen the usage of our homepage more than triple – globally. (Yahoo! Internal Data)
· Adds voice search for iPhone and increases availability across other mobile devices
. Emerging markets are a key growth driver; for instance, in Indonesia we see nearly twice as many more mobile search users than we do on the PC. (Yahoo! Internal Data)
· iPhone / BlackBerry Apps for Yahoo! Finance, Yahoo! Fantasy Football and Flickr (iphone only, as there was already a BB app for Flickr)
· New Y! Mobile Homepage for US Hispanics
· Continue to sign strategic partnerships for leading mobile services, including Chunghwa Telecom and o2 Germany (mobile search, displacing Google)
. We have over 100 mobile operator and OEM partnerships around the world.

Advertising
· Rich Ads in Search: Most innovative way to bring display benefits to search and launched before any other search engine could have.
· Search Retargeting: Yahoo is the only media company that can leverage display and search effectively, as such Search Retargeting (uses a recent search query to serve up a relevant display ad) is something only we can do and do well.
· Innovative Strategy: Right Media going upstream. We have the largest ad exchange, in 2009 we decided to make it all about premium to have our exchange community be more appealing to big brands and publishers.

Acquisitions
· Xoopit–2008 Hack day winner. Brings phenomenal photo organization, improved photo sharing, and the serendipity of discovering forgotten photos to Yahoo! Mail.
· Maktoob–Acquisition accelerates Yahoo!’s strategy of expanding in high-growth emerging markets where we believe Yahoo! has unparalleled opportunity to become the destination of choice for consumers.

[The C- photo is from Yahoo's still-terrific Flickr.]

The S3 service is great but this just proves you can’t rely on it, this is a major issue especially since it’s been down for so long. Way to go Amazon.”

–a post on Amazon’s Simple Storage Service forum

Amazon’s Simple Storage Service (S3) suffered a “massive” outage this morning, impacting a number of businesses that rely on the cloud-based storage service. Twitter, Tumblr and AdaptiveBlue were among the more widely known services to be affected, although there were many others. “Amazing how many of the services I use are reliant on S3,” venture capitalist Fred Wilson Twittered this morning. “Stuff is broken everywhere this morning.”

Amazon (AMZN) was able to resolve the issue in a matter of hours, but its failure to inform its customers of the outage and its efforts to correct it drew some harsh criticism from users. “Amazon’s response was substandard in this case,” said one. “I should, minimally, see a message on the front page at aws.amazon.com when there’s a complete outage. Instead, I had to come into the forums to make sure it’s not just my stuff. Like others here, I have a massive number of files (probably about 125,000 audio files, around 1TB of storage) that are for various music libraries. So I have customers with sites that are only partially functional, and nothing to tell them. That’s unacceptable. And I know you can do better. I’m not looking for details of the outage, just an acknowledgment (again, front page of aws) and ETA.”

Said another: “It’s AmazING the fact of having no info on what’s happening. Absolutely unacceptable. Come on, people on this forum are all tech guys, so we understand that bad things happen from time to time. However, you MUST be transparent with your customers and give them details on what’s going on (yes, we want to know exactly what’s happening and not a standard response like ‘The issue is resolved’). In fact, it is not. So please, scale these complaints to the right person and post the technical explanation of the issue as soon as possible.”

The S3 service is great but this just proves you can’t rely on it, this is a major issue especially since it’s been down for so long. Way to go Amazon.”

–a post on Amazon’s Simple Storage Service forum

Amazon’s Simple Storage Service (S3) suffered a “massive” outage this morning, impacting a number of businesses that rely on the cloud-based storage service. Twitter, Tumblr and AdaptiveBlue were among the more widely known services to be affected, although there were many others. “Amazing how many of the services I use are reliant on S3,” venture capitalist Fred Wilson Twittered this morning. “Stuff is broken everywhere this morning.”

Amazon (AMZN) was able to resolve the issue in a matter of hours, but its failure to inform its customers of the outage and its efforts to correct it drew some harsh criticism from users. “Amazon’s response was substandard in this case,” said one. “I should, minimally, see a message on the front page at aws.amazon.com when there’s a complete outage. Instead, I had to come into the forums to make sure it’s not just my stuff. Like others here, I have a massive number of files (probably about 125,000 audio files, around 1TB of storage) that are for various music libraries. So I have customers with sites that are only partially functional, and nothing to tell them. That’s unacceptable. And I know you can do better. I’m not looking for details of the outage, just an acknowledgment (again, front page of aws) and ETA.”

Said another: “It’s AmazING the fact of having no info on what’s happening. Absolutely unacceptable. Come on, people on this forum are all tech guys, so we understand that bad things happen from time to time. However, you MUST be transparent with your customers and give them details on what’s going on (yes, we want to know exactly what’s happening and not a standard response like ‘The issue is resolved’). In fact, it is not. So please, scale these complaints to the right person and post the technical explanation of the issue as soon as possible.”