By Shivaun Hales

Heavy competition in the smartphone industry has seen HTC miss forecasts and post its steepest profit drop in a decade.

The Taiwanese smartphone maker reported a first quarter net income of $NT4.46 billion (AUD $146 million), down 70% compared to a year earlier.

HTC revenue for the quarter fell 35% to $NT67.8 billion (AUD $2.2 billion).

HTC chief financial officer Winston Yung said the company "dropped the ball" with new product releases during the fourth quarter.

"The form factor could be better and the product design could be better. So we've learned lessons from the fourth quarter products," Yung told Bloomberg in a February interview.

The company has pinned hopes on its new One range to regain market share lost to Apple and Samsung.

"While HTC's operation is likely to turn around in the second quarter with its launch of new "One" series smartphones, there are uncertainties over its shipment momentum from the third quarter as Samsung and Apple are expected to launch new smartphones," said Yuanta Securities analyst Bonnie Chang.

According to technology research firm IDC, HTC held 8.9% of the global smartphone market in 2011, behind Samsung's 19.1% and Apple's 19%, with Research in Motion trailing at 10.4%.