UPDATE 1-HTC expects quiet Q4 as competition intensifies

* Q4 revenue could fall about 15 pct y/y to T$40-42 mln

* Expects Q4 gross margins at about 32.5 pct

* Sees Q4 operating expenses at about 17 pct of revenue

* Shares largely flat this year, lagging big board (Adds details, quotes)

TAIPEI, Nov 9 (Reuters) - HTC (2498.TW), the world's No. 4 smartphone brand, expects fourth-quarter revenue to be almost 15 percent lower than the same period a year earlier, as competition intensifies and prices decline in the fast-growing sector.

Revenue in the October-December quarter could clock in at between T$40-42 million ($1.3 million), the company said in a statement on Monday, lower than the T$47 million recorded a year ago.

Average selling prices are also expected to fall about 10 percent from a year ago, as bigger rivals such as Nokia (NOK1V.HE) and Apple APPL.O look to muscle out smaller players, while upstarts such as Acer (2353.TW) depress prices.

"Things are sounding a little subdued for them," said Vincent Chen, an analyst at Yuanta Securities. "I'm hearing that HTC doesn't have visibility beyond the next couple of months, and the first quarter could be very weak."

HTC announced worse-than-reported third-quarter results in October, hit by rapidly intensifying competition in the smartphone sector from rivals such as Blackberry maker Research in Motion (RIM.TO) (RIMM.O). [ID:nTP206011]

Gross profit margins in the fourth quarter will likely come in at about 32.5 percent, the company said in a statement, while operating expenses are likely to take up 17 percent of its total revenue.

HTC shipped some 2.4 million smartphones in the third quarter, research firm IDC said on Nov. 5, keeping its fourth place on the charts behind Nokia, RIM and Apple.

Its shares have remained largely flat this year, lagging a roughly two-thirds advance on the benchmark TAIEX .TWII share index. (Reporting by Kelvin Soh; Editing by Jacqueline Wong)