HTC barred from Windows 8

Microsoft has reportedly excluded Taiwanese phone maker HTC from developing Windows 8 devices over a perceived lack of experience and sales.

Inside sources told Business Week that Microsoft had barred HTC from its new operating system because it was concerned HTC was not a big enough player in the mobile market.

According to analyst firm IDC, HTC ranks fifth in the smartphone market with five percent of market share. It sits behind market leaders Samsung and Apple, as well as struggling phone makers RIM and Nokia.

Business Week's sources said that HTC was also too inexperienced at making tablets.

Microsoft’s Windows 8 is widely expected to be a make or break release for the company.

It is due to launch around September in three flavours, including the ARM version for tablet devices, Windows RT. 

Many PC vendors, including the likes of Acer, Asus and Toshiba, have already revealed plans to launch Windows 8 products later in the year.

Bleak outlook for Q2

News of HTC's Windows 8 exclusion signals further difficulties for the company, which today downgraded its second-quarter revenue target by 13 percent.

HTC blamed lower-than-expected European sales and delayed product sales in the United States for the drop.

It is forecasting global revenue of about NT$91 billion ($A3.07bn), down from its original prediction of NT$105 billion.

"Given all the things happening in the second quarter here, we certainly hope we can get the right guidance and have a more smooth transition going forward," chief financial officer Chia-Lin Chang told Reuters.

HTC’s net profit in the first quarter dropped 70 percent to NT$4.464 billion ($A151.5 million), in line with expectations.