The reason for the change in plan was reportedly HTC's belief that there was very low demand for the Windows RT operating system in the market. According to Bloomberg, an HTC official confirmed the news saying that making tablets was proving to be very pricey for HTC and by merging it with Windows RT, they were taking a huge market risk.
Reports in May suggested the number os Windows RT tablets shipped in the first three months of 2013 - according to research firm IDC - was as low as 200,000. Windows RT is a "lite" version of Windows 8 built specifically for tablets which lacks the ability to run all legacy Windows software.
"Microsoft and its partners have released a total of five Windows RT devices since October. However only the company's own Surface RT is widely available in stores" Tami Reller, chief financial officer of the Windows unit, said in an interview with Bloomberg, earlier this month.
With rising competition in the smartphone market, HTC is still struggling to survive, which would be more of a reason for them to bring out only products its knew would succeed. However it had been widely speculated that the company would release a 7in tablet running on Windows RT and powered by an ARM processor towards the end of the year.