"We are pleased to have a close strategic relationship with Qualcomm and look forward to bringing continued industry-changing devices to market," HTC Chief Executive Officer Peter Chou said in a statement.

Earlier this year, HTC had said it expected third-quarter sales to grow by a high single-digit percentage rate from a year earlier, after it launched this June its own-branded phone, HTC Touch, in Europe and in Asia.

The company plans to roll out the new model in the United States by the end of the year, aiming to compete with Apple Inc's iPhone.

The Taiwan company is the world's biggest maker of devices that combine phone functions on personal digital assistants (PDAs) with mobile communications, and it uses Microsoft Corp.'s operating system for mobile phones.

In addition to selling its own-branded smartphones, HTC serves a clientele that includes T-Mobile, Verizon, Orange, NTT DoCoMo, and PC makers Dell Inc. and Hewlett-Packard.

The announcement came after the Taipei stock market closed Wednesday, when HTC's shares fell 1.24 percent to NT$477.00, underperforming a 0.1 percent drop on the main TAIEX share index.

Qualcomm, which has been caught up in antitrust claims by chipmaker Broadcomm Corp , had said it was confident that the case will end favorably for the firm.