HTC has halted its plans to produce a large-screen Windows Phone 8 smartphone over concerns that the device would have a lower resolution than competing models, Bloomberg reported.

"The Windows software doesn't support resolutions as high as that on Google's Android platform," the report quoted an unidentified person close to the matter. Windows Phone 8 currently supports resolutions up to 1280 x 720 (720p) and 1280 x 768. While most updated Windows software support a screen resolution of 720 horizontal lines, Android OS is able to support 1,080 lines on smartphones and tablets. HTC has two Windows Phone 8 handsets currently, the 8X flagship and an 8S mid-range device.

The decision to scrap the smartphone project using Windows Phone 8 software is a heavy blow for Microsoft, which aims to grab its lost glory from Google and Apple. HTC is now left with only Android for its phones measuring larger than 5 inches diagonally. The decision would also affect the Taiwanese company's efforts to capture market share from Samsung, which offers larger screen devices.

HTC's stock dropped 3.2 percent to NT$274 in Taipei trading today, which extended the company's decline this year to 45 percent. According to data compiled by Bloomberg, HTC's global smartphone market share declined to 4.6 percent in the third quarter from 10.3 percent a year earlier while Samsung further widened its market. HTC also witnessed a sharp decline of its U.S. handset market share which dropped to 3.6 percent from 11.6 percent.