HTC released unaudited Q1 2012 sales figures today, and the painful results show the Taiwanese manufacturer is floundering due to heavy competition.

First-quarter revenues pulled $2.3 billion USD, which is a 35-percent drop year-over-year (PDF), while net profit plummeted 70 percent to roughly $148 million USD.

HTC Chief Financial Officer Winston Yung predicted the rough quarter due to increased competition from Samsung and Apple, but he also blamed HTC for the sudden down spiral.

“We simply dropped the ball on products in the fourth quarter,” said Yung said during the Feb. 6 conference call, while noting the Rezound and Vivid handsets did not meet the company’s expectations.

HTC has been struggling since the second half of last year and disappointing Q4 2011 earnings (PDF) even inspired a new handset strategy. The manufacturer announced it would no longer clutter the smartphone market with a sea of generic Android devices and would instead focus on the One line of high-end Android smartphones.

Following its promise, HTC announced the Evo One earlier this week that will highlight Sprint’s new LTE network.