Sales of HTC’s flagship handset could take a 40 percent dive this quarter, according to Macquarie Securities. The outfit forecasts HTC One shipments will drop to between 1.8 and 2.1 million units this quarter, although sales in the previous quarter were in the 3 to 3.5 million unit range.

However, it’s not that the HTC One is facing stiffer competition – it is not. The drop is expected because the high-end market is oversaturated and the phone itself is becoming a mature product. Luckily HTC has another ace up its sleeve, in the form of the HTC One Mini, which could help it maintain its gains before the next generation flagship is ready. It is also rumoured that HTC is working on a phablet based on the One design.

HTC One shipments seem to have peaked in May, with 1.5 million units. In June the figure was closer to 1 million and a further decline to 600,000 to 700,000 units is expected between June and September.

However, the Mini might not be enough to turn HTC’s fortunes around. HTC is at a disadvantage when it comes to mid-range phones, due to its current cost structure and lack of distribution channels. Samsung is a lot better at peddling low- and mid-range phones, even when it has inferior products.

More here.