Thursday 24 October 2013

HTC looking to outsource smartphone production: Reports

Reports coming in from Wall Street Journal and Reuters suggest that HTC is planning to move some of its smartphone production to contract-manufacturers as seeks ways to save money.

The Taiwanese manufacturer, which reported its first quarterly loss in Q3, has been in talks with FIH Mobile and Wistron contract manufacturers to outsource smartphone production as the in-house production is becoming more expensive due to the lack of big volumes. According to Wall Street Journal, HTC has met actively with contract manufacturers in recent months as the management is looking at all options for a viable turnaround plan.

As per Reuters’ sources, HTC has halted at-least one of its four major manufacturing factories and was even thinking of selling the out-of-use production lines in China and Taiwan. While HTC has denied any factory sales plans, it won’t be surprising to see if it actually sells one or two of its production lines to bring in cash.

“HTC’s cash flow is not doing well. It has to do something soon to generate cash,” one of the sources with direct knowledge of the manufacturing sale plan told Reuters.

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