Struggling smartphone manufacturer HTC’s woes appear set to continue after the Taiwanese firm posted a 58% fall in profit year on year. In its unaudited results, HTC says it pocketed TWD7.4bn (USD247.4m) during Q2, some way below the TWD17.52bn (USD585.7m) profit the firm recorded during the same quarter last year, with the firm blaming its performance on weak European demand and delayed US sales after losing a patent battle with Apple. Revenues for the quarter ending June 30 also fell, dropping 27% year on year to TWD91bn (USD3.04bn), from TWD124.4bn (USD4.15bn) a year earlier. HTC had forecast a 55% rise in revenues for the quarter as it hoped for a turnaround. The results mark further trouble for HTC which, despite a period of success where it became the top smartphone manufacturer in the US, is struggling to compete against Apple’s iPhone and devices running on Google’s Android OS.

The firm’s results, though an improvement on its Q1 performance, indicate that it is struggling with its turnaround, despite the high-profile launch of its One X smartphone in April. The launch of Apple’s iPhone 4S in October last year is cited by some commentators as a driving factor in HTC’s decline, particularly in the US. HTC’s latest results are in stark contrast to those of Samsung, which is seeing continuing growth in smartphone sales. Samsung says operating profits for its latest quarter will be up 79% year on year, boosted by the strong performance of its flagship device, the Galaxy S III.

While HTC was early to capitalise on the boom in Android-based smartphones, it is in danger of falling behind as a greater number of competitively priced Android devices points hit the market. Though Android accounts for half of the US smartphone market, consumers are opting for different vendors such as Samsung and LG, both at the high and low-end of the market. However, HTC CEO, Peter Chou, has already rejected the possibility of entering the cheaper end of the smartphone space, claiming that HTC doesn’t want “to destroy our brand image”.