HTC Corporation posted its third consecutive drop in quarterly profit as intensifying competition from Apple and Samsung Electronics hurt sales.
The Taiwan smartphone maker said profits dropped 58% to 7.4 billion New Taiwan dollars ($248m) on revenue of NT$91 billion in the 3 months to June.
It had reported a 70% drop in the first quarter and a 26% drop in the final quarter last year.
HTC has grown on the strength of the design of its handsets, based on Google's Android operating system.
But its sales have fallen sharply in a global market increasingly dominated by Apple and Samsung Electronics.
The company predicted third quarter revenue of NT$70-80 billion, down 41-48% from the same time last year. HTC had hoped to win back some of its market with the launch of "HTC One" series, which offers users a better camera and music experience.
But following the huge popularity of Samsung's Galaxy handsets, the model's key US carrier, AT&T, recently slashed the prices of "HTC One" by half, which may hurt HTC revenue.
As a young business which only began building its own global brand in 2006, HTC chief financial officer Chang Chia-lin recognised that the company "needed to work harder" to lure consumers to its handsets in a volatile and competitive market.
Chang said the US will continue to be an important market, but the emerging China market "will be a key driving force for our fu ture growth."
He declined to comment on whether the Chinese market's preference for low-end, low-priced handsets would drive down the company's overall revenue.
Last month, HTC announced it was selling half of the 50% stake it had bought in US headphone maker, Dr Dre's Beats Electronics, raising concerns about the soundness of the company's acquisition strategy.
Chang said the equity sale is to "create a win-win situation" to give Beats' managers more flexibility to boost their product value. But he indicated the need for more caution in investment.
"We will continue to invest in the future," Chang said. "But we will allocate resources to focus on key growth areas, such as production innovation, sales and marketing," he added.