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HTC facing difficulties in customizing first Android handset for AT&T, sources say

HTC's first custom-made Android handset for AT&T, the HTC Lancaster, was originally planned for a third-quarter launch but the launch will be either delayed or canceled because the model has not yet passed AT&T validation, according to industry sources in Taiwan.

The setback in the launch of the Lancaster will not only affect HTC's revenues for the second half of 2009 but also force HTC to adjust its policy on the deployment of Android platform, the sources asserted.

In addition, HTC may also see its strength further weaken by a flood of 15-20 Android-powered handsets to be launched by 8-9 other handset vendors, including Motorola, LG Electronics (LGE) and Sony Ericsson, in the second half of this year, the sources added.

HTC's share in the smartphone segment in the North American market already dropped to 5.6% in the second quarter of 2009 compared to 8% in 2008, according to data compiled by Canalys.

However, HTC's plans to launch at least five new models in the North American market in cooperation with four telecom carriers in the second half may help halt the declining share, the sources said.

HTC will also launch two customized handsets based on Windows Mobile 6.5 for AT&T, the Warhawk (Touch Diamond 2) and Fortress (Touch Pro 2), in October 2009, the sources indicated.

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