Wednesday , April 26 2017

HTC factories slowing production according to report, but not according to HTC

It hasn’t been the best of years for HTC, announcing their first ever operating loss earlier this month, after first announcing some issues sourcing parts and it appears that sales may not have improved yet according to a Reuters report that’s just been released.

According to Reuters who claim that they have seen at least one of four factories operated by HTC closed during a visit to the former headquarters of the company in Taoyuan, outside of the Taiwanese capital of Taipei. The reporter from Reuters found the loading docks closed and a sign on the lobby door which said ‘Lobby is temporarily closed for use. Thank you for your cooperation’.

While a shuttered dock and closed Lobby, do not a closed facility make, according to sources that Reuters spoke to, two of the production lines at the facility had been combined into one, effectively almost halving production down to around 1 Million devices per month. This has actually been a longer term closure as indicated by further sources who advised that ‘Manufacturing has been halted since at least August on the line, housed in a facility called Building H, while production continued at a nearby plant known as TY5.’

Further sources indicated that production lines for smartphones at HTC’s Shanghai based manufacturing facility had also been closed down, ending supply of possibly a further 2 Million devices.

The sources also stated that HTC’s current financial situation was forcing them to look into possibly selling facilities in both China and Taiwan.

HTC however refutes the story, HTC Chief Marketing Officer Ben Ho in a phone interview with Reuters refused to comment directly on the factory in question but did advise

Like any manufacturer, we do volume planning to optimize our lines, our manufacturing and production facilities.

Whether we are operating those facilities depends on market demand and our own expectations. When you have less demand you work with less facilities to optimize your costs. When you have demand, or bigger growth, you definitely have to activate all these facilities.

And it seems that HTC wants to further re-enforce this point, stating in an email response to queries from Reuters that :

HTC in not shutting down nor has plans to sell any of its factory assets. HTC has a very strong balance sheet and will provide the latest financials in our upcoming earnings call to investors and the broader community.

It could all be a storm in a teacup, but with HTC’s performance over the last four financial quarters there may at least be a little bit of fire in this story. The best we can do is await the next quarters financial results to see if the release of the HTC One Max could possibly restore confidence in the Taiwanese manufacturer. Indeed there is a lot of good will towards the company who has often been seen as delivering some of the most well designed handsets in the Android market.

Source: Reuters.
Thanks: Jeni.

Daniel Tyson   Editor at large

Dan is a die-hard Android fan. Some might even call him a lunatic. He's been an Android user since Android was a thing, and if there's a phone that's run Android, chances are he owns it (his Nexus collection is second-to-none) or has used it.

Dan's dedication to Ausdroid is without question, and he has represented us at some of the biggest international events in our industry including Google I/O, Mobile World Congress and IFA.

  • V-Man

    My company stopped stocking the HTC one about 2 months ago due to poor sales.

    • ltk

      So many people said the One was a great phone, that no body buy. They blame it on marketing. But reality is the customer has lost confident in HTC.

      • Sujay Vilash

        You are on the mark with this observation. But I hope HTC survive.

  • Lachlan

    I want to buy a One but I just can’t justify the cost where I can get a Galaxy cheaper

    • Lachlan

      Kidding, I bought a N4, I really don’t want to be paying more than $450 for a phone

    • Sujay Vilash

      But the HTC One is worth the money. Let me pick out two brilliant features for you. 1) BoomSound. With the stereo speakers (in the front, no less), you have never heard sound like this from a smartphone before. 2) Zoe. This little talked about feature allows you to remove articles in a photo and to make someone smile if they forgot to smile when you pressed the shutter but smiled right after that. I would have to say that the One is the best phone I have ever owned. Plus, it is highly customisable if you are willing to delve into rooting and such.

  • Sujay Vilash

    I have always said that HTC’s marketing is all wrong. Sure they cannot compete with the coin being spent by Samsung. So they need to be smarter. They need to go to telco’s around the world and offer their sales staff incentives to sell the HTC range. When a product earns a sales person extra money, they tend to push them more. Very simple really. But try telling HTC that.

    • Danny!

      I think sales staff would spend enough time with the devices to know that anything is better than a Samsung. But nothing that stop someone that wants the popular phone.

      • Sujay Vilash

        I hear you. But I was thinking out loud from the perspective of what HTC should be doing to increase their sales. I used to work in a bottle shop. Every now and then, Johnnie Walker would come in and offer sales incentives such as rebates for selling JW Red. Even though I consider JW Red to be an inferior product to something like J&B Rare, I would still push it because of the rebate. For the period of the rebate, my sole intention was to sell JW Red and convince people buying other brands to buy JW Red. Not because it was a good whiskey, but because of the rebate I was earning. And I was thinking along that line.

        Hypothetically, if HTC went to Telstra and told them that for every HTC One sold, Telstra would get $X and the sales person would get $Y as incentives, which product do you think Telstra would want their sales people to push ? All of a sudden, they would put Samsung to the back of the store and HTC to the front (reversing what they are doing now).

        At the end of the day, whatever HTC are doing is not working. Therefore, they have to look outside the square and think of other ways to increase sales. They already build brilliant phones so pumping out more models which customers are not buying is not the answer. They have to create demand. And that is the angle I am trying to tackle.

        Good to hear from you though.

        • ltk

          It’s thinking like this that lead to HTC downfall. Pretty sad really.

          • Sujay Vilash

            What ? How so ? I am advocating for HTC to stop spending millions on marketing programs that do not GUARANTEE sales and asking them to put the same money into programs that WILL GUARANTEE sales ? And this thinking is what is leading to their demise ? Mate, go back to bed. You have no idea what you are talking about. And if you don’t have anything constructive to add to the discussion, stop trolling.

          • ltk

            The troll calling other trolling. How ironic.

          • Sujay Vilash


          • ltk

            NP, have a nice weekend mate.

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