BANGALORE, Aug 11 (Reuters) - China's Ninetowns Digital World Trade Holdings Ltd.?on Thursday lowered its full-year 2005 earnings and revenue outlook, due to the expected development of competing software products, sending its shares down about 32 percent.

The software developer slashed its outlook for 2005 diluted earnings per share to a range of 44 cents to 50 cents, down from its previous estimate of 60 cents to 70 cents.

Ninetowns Chief Executive Officer Shuang Wang said in a statement he expects competing products to enter the market in the near future following a request for bid proposals from a Chinese government agency that now accounts for virtually all of the company's revenues.

Ninetowns, which went public last December, expects the introduction of competing products will require it to shift its focus significantly toward software service revenue from software sales services, he added.

The company cut its outlook for net revenue for the full year to a range of $26.5 million to $30.5 million, from its previous estimate of $31.4 million to $36.2 million.

Two analysts on average have forecast the company to earn 62 cents per diluted share, on net revenue of $31.7 million, according to Reuters Estimates.

The company earlier on Thursday posted second-quarter net income of $5.1 million and diluted earnings per share of 14 cents.

For the third quarter 2005, the company said it expects diluted earnings per share in the range of 11 cents to 12 cents, on net revenue in the range of $7.1 million to $7.4 million.

One analyst expects the company to earn 17 cents per diluted shares on revenue of $7.9 million, according to Reuters Estimates.

Shares of Ninetown were down $2.40 to $5.18 in morning trade on the Nasdaq, after earlier hitting a record low of $5.05.