HTC is reportedly "locked out" of the initial group of companies set to release products running Windows 8 when Microsoft officially releases its next-generation operating system for PCs and mobile devices later this year.
The struggling handset maker, which in April reported a 35 percent decline in revenue for the first quarter of 2012, may have something for the second wave of Windows 8 products but won't participate in the launch of the OS, according to unnamed sources cited in a Bloomberg report published earlier this week.
Microsoft is concerned "that HTC doesn't sell enough devices or have ample experience making tablets," the news agency reported. Taiwan-based HTC was one of the first device makers to produce smartphones running Microsoft's Windows Mobile OS and then Windows Phone, but has largely shifted its focus towards Android-based devices in recent years.
Asked to comment, Microsoft on Thursday described HTC as "a strong partner now and for the future" but declined to confirm or deny the Bloomberg report.
One area of disagreement between the two companies concerned the extent to which HTC would be able to modify the Windows 8 home screen on its devices, according to Bloomberg. Microsoft apparently didn't like what it was hearing about HTC's plans for a customized home screen and subsequently refused to give HTC access to developer versions of the new software, the news agency reported.
Microsoft has also opted to launch Windows 8 with companies that have higher sales volume than HTC, according to Bloomberg.
In 2008, Open Handset Alliance member HTC developed and released the first phone running Google's Android OS, the HTC Dream. In recent years, Microsoft has tightened its relationships with HTC competitors, particularly Nokia.
Windows 8 is expected to be released this fall. For the first time, Microsoft is including a version of the OS that's built specifically for the ARM-based processors used in the bulk of the smartphones and tablets currently on the market. Formerly known as Windows on ARM, Windows RT is being touted as a challenger to both Android and iOS, the mobile operating system Apple uses in its iPhone and iPad products. For more on that, see Eyes On Windows RT at Nvidia's Computex Booth.
It wasn't exactly clear from the Bloomberg report if the unnamed sources are saying that HTC is being squeezed out from all versions of Windows 8 at launch, though that seems to be the indication. A version of Windows 8 that's optimized for the x86-based mobile device chips made by Intel is also being released.
Many device makers are readying Windows 8 products using both Intel's next-generation Atom System-on-a-Chip (SoC), codenamed Clover Trail, and ARM-based processors from companies like Qualcomm and Nvidia—but it appears that HTC may not be among them.