Shares in HTC plunged by its daily maximum limit of 7 percent this morning after the Taiwanese smartphone-maker slashed its full-year revenue forecast late Friday, reports Reuters. Shares in the firm declined to TWD372.50 (US$11.39) and major investment banks such as Merrill Lynch, Nomura, JP Morgan and Citi downgraded the company’s stock, saying they saw no short-term recovery. “We expect the company’s operating profit margin to fall up to next year at least, which will further pressure profitability and make it look even less attractive,” said Vincent Chen, an analyst at Yuanta Securities. “HTC is competing against some of the biggest names in the industry, and it hasn’t done enough to build on its brand awareness.” HTC has been an early pioneer of Google’s Android platform – releasing three Android phones to date – but competes against industry heavyweights such as Nokia, Research In Motion and Apple in the smartphone space.

On Friday, HTC said that revenue this year could fall by a low to mid-single digit percent, compared to its previous forecast of about 10 percent growth. It now expects third-quarter revenue to be between TWD34 billion and TWD36 billion, down from TWD37.86 billion in the third quarter last year. The firm blamed a delay in the launch of new products and a faster-than-expected fall in unit shipments for the shortfall. “Our momentum in the second half of this year may not be as strong as we initially thought it would be,” HTC’s Chief Executive Peter Chou said during a call with analysts. “The number of mid-tier smartphones we’re pushing out this year will gradually increase, which will push down revenue. Momentum on both the Windows Mobile and Android platforms are also turning out to be weaker than expected.” The development took many by surprise as the overall smartphone market is tipped for strong growth this year. HTC said it will also raise its operating budget this year to above 15 percent (from 13.5 percent previously) to fund an expanded marketing campaign. It expects a gross profit margin in the third quarter and the full year of about 32 percent, in line with previous guidance.