The mobile phone designer also blamed a slower-than-expected ramp-up of China’s 3G (third generation) mobile networks and the delay of a few smartphone models until next year for the revised forecast.
HTC now expects revenue for the full year 2009 to decline slightly compared to last year, worse than its previous guidance of 10 percent year-on-year revenue growth.
"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."
Revenue this year could fall by a low to mid-single digit percent, compared to its previous forecast for growth of about 10 percent, the company said.
HTCâ€™s average selling price has also seen a decline, from US$381 per handset in Q2 2008 to US$364 in Q1 2009 and now US$358 per unit in Q2 2009.
The company, which is the world’s No. 4 smartphone brand, intends to counter this effect by increasing marketing spend, as it seeks to compete against the other smartphone incumbents like Nokia and RIM.
It still expects gross profit margin in Q3 and the full year off around 32 percent.
The announcement came after the market close, with HTC shares ending down 0.1 percent in a broader Taiwan market up 0.7 percent.