HTC’s dark days continue, as it’s shunned by Microsoft over Windows RT

HTC Sense RainProving what goes up must come down, HTC is going through some difficult times at the moment, as it’s plagued by reports of stock write-offs, falling profits and now, of being left off the invitation list for Microsoft’s Windows RT party.

With its humble beginnings as an OEM manufacturer, and maker of unattractive but often strangely alluring Windows Mobile handsets, HTC rose to super stardom when Android came of age. It was there right from the start with the G1/HTC Dream, and continued to make exciting, unusual devices for several years.

Now, Samsung has become the manufacturer to watch when it comes to Android phones, and HTC is suffering as a result.

It reported that net profits for the first quarter of 2012 were down 70-percent, and that sales in May were 26-percent down on this period last year, forcing a 13-percent cut in its target for the second quarter. This drop forced the company to write-off unsold stock left over from last year.

As if further proof that dark clouds were gathered over HTC’s headquarters were needed, a report by online advertising analysts Chitika showed that between October 2011 and March 2012, HTC’s share of web traffic dropped by 60-percent, while Apple’s rose by the same amount. And all this comes amidst lawsuits from Apple and shipments of its latest phones being delayed at the border too.

No Windows RT for HTC

With interest in its Android phones obviously dwindling, HTC could have turned to Microsoft, hoping to capitalize not only on Windows Phone, but on the forthcoming release of Windows RT too.

Windows RT is an ARM-compatible version of Microsoft’s next desktop operating system, and is important as it will see the OS used on more affordable, mass-market tablets.

Sources familiar with the matter (so take that as you will) have spoken to Bloomberg, and said that Microsoft won’t be including HTC in the initial development run of Windows RT tablets, due to the company’s lack of experience in the market.

This doesn’t sound all that fair, given HTC advertises three different tablets on its site, the Flyer, Jetstream and the Evo View 4G. While not especially up-to-date, the Flyer was one of the more interesting entries into the Android tablet market on release, mainly due to its Scribe stylus, which came before Samsung’s S-Pen.

Bloomberg’s report also mentions HTC wanted to customize the look of Windows RT by adding a unique home screen, much like it does with HTC Sense over Android. Given Microsoft doesn’t allow manufacturers to cover Windows Phone with own-brand skins, it could have decided to enforce a similar rule with Windows RT too. Perhaps this played a bigger part in Microsoft’s decision to exclude HTC?

HTC may not be left out in the cold forever, and could be invited to produce a tablet using Windows RT for the second run next year, but it can’t rely on this to turn its fortunes around.

But when a phone as accomplished as the One X isn’t racking up the sales, it must be difficult for them to know what to do next.