SIM Technology Group (HKG:2000) has warned that it may incur a loss for the year ended 31 December 2011 as compared to a profit for the year ended 31 December 2010. Such loss is primarily attributable to the fact that the group has underestimated the difficulties in meeting its top-tier customers' quality requirement and hence the actual costs in manufacturing were higher than expected. As a result, the gross profits of the group were lower than the management's previous anticipation. In addition, contribution from open market handset segment continued to decline as compared to the first half of 2011.