According to a Reuters report, five employees of HTC were detained for questing over a breaches in Taiwanese mobile phone maker's trade secrets. Four of the five employees were from the research and development unit.

Deputy Chief Prosecutor Huang Mou-hsin told Reuters over the phone last August 31 that two of the five employees were still in jail while the three had posted bail.

KGI Securities analyst Richard Ko addressed in a report to the company's clients today that the recent arrest might endanger HTC business-wise. "We believe the investigation and detention of HTC's key R&D executives will have damaging impact on its new model roll-out in the next 6 months," he said. When asked for a comment, HTC emailed its response today saying that the trade secrets breach had not affect its operations and that products aligned for the fourth quarter would still be on schedule. However, they would not say what trade secrets were involved in the breach.

HTC has not been doing good in the smartphone market against powerhouses Samsung Electronics Co. and Apple Inc.. Although the company's market share peaked in 2011 and was the first who used Google software on its smartphones, the Taiwanese phone maker' market shares dipped 88%.