HTC provided a forecast for the first quarter of 2014 that indicates the continued challenges it is facing, with its January sales numbers failing to impress, although the settlement of its patent lawsuits with Nokia has at least lifted some uncertainty for the ailing smartphone maker.

It is anticipating first-quarter sales of between TWD34 billion (US$1.12 billion) and TWD36 billion, compared with TWD42.8 billion for the first quarter of 2013. And its monthly sales figures for January show it is already off to an uninspiring start: sales of TWD9.67 billion are down 37.75 per cent year-on-year.

In a statement, Peter Chou, CEO of HTC, said: “We will continue to stay focused on making the best smartphone and building a compelling mid-range portfolio. Meanwhile, we are going to communicate better with consumers.”

The company is expected to launch a new flagship device in the near future, and has acknowledged previously that it has suffered at the hands of fierce competition in the mid-tier.

Meanwhile in a statement issued on Friday, it was revealed that HTC had settled all patent litigation with Nokia, and entered into a “patent and technology collaboration agreement”. The Taiwanese player will make payments to the Finnish company, and “the collaboration will involve HTC’s LTE patent portfolio, further strengthening Nokia’s licensing offering”.

The move seems a sensible one, in that HTC has suffered from several high-profile losses in cases with Nokia, including in the UK and Germany. Specialist website FOSS Patents said that the US International Trade Commission was today set to rule on another action, where HTC had lost out in the preliminary rounds, which could have led to a US import ban on HTC smartphones.

In a statement, Grace Lei, general counsel of HTC, said that the settlement “will enable us to stay focused on innovation for consumers”.

HTC also reiterated its fourth-quarter 2013 figures. For the three months, the company saw a net profit of TWD0.31 billion, compared with TWD1 billion in Q4 2012, on revenue of TWD42.9 billion, down from TWD60 billion. On an operating level, the company saw a loss of TWD1.56 billion, compared with a prior-year profit of TWD0.6 billion.