HTC OEM/ODM Orders Take a Hit; More Choice in 2007 and Beyond

[Darius Wey]

<div class='os_post_top_link'><a href='http://www.digitimes.com/news/a20070115PD202.html' target='_blank'>http://www.digitimes.com/news/a20070115PD202.html</a><br /><br /></div><i>"High Tech Computer's (HTC's) OEM/ODM orders for handsets have been slowly eroded by other Taiwan-based handset makers after HTC began to push its own-brand handset business in mid-2006, with Chi Mei Communication Systems (CMCS) being the latest to put a dent in orders placed with HTC, according to market sources. CMCS, an affiliate of Hong Kong-listed Foxconn International Holdings (FIH), has recently received orders for smartphones from Hewlett-Packard (HP) and Palm, with volume shipments likely to begin by the end of 2007, the sources indicated. Although HTC currently is still one of the suppliers of iPAQ-series handsets to HP, the US vendor is expected to terminate its relationship with HTC by the second half of this year since HP has also added Quanta Computer and LG Electronics to its list of handset suppliers, in addition to CMCS, the sources noted. Palm is also likely to lower its shipment volume from HTC, since Taiwan-based Inventec Appliances has now begun volume shipments of Treo-series handsets to Palm, with CMCS to follow suit by the end of this year, the sources stated."</i><br /><br />It looks like HTC has a tough year ahead. Since the company decided to market devices under its own brand, its OEM/ODM orders have suffered with major players such as HP, Palm, i-mate, and O2 switching to the lesser-known Quanta, Asus, Arima Communications, Gigabyte, and Inventec. From a consumer perspective, this may not be a bad outcome. With more manufacturers now offering Windows Mobile-based devices than ever before, we can expect a greater variation of gadgets on store shelves in 2007 and beyond. As for HTC, it is very unlikely that they'll be out of the game anytime soon. What we're seeing now is <i>competition</i> - something that HTC has so successfully avoided over the past few years. Add in Apple's iPhone, and we may finally see HTC and the aforementioned emerging manufacturers use competition to innovate on multiple fronts. Fingers crossed.

[Tierran]

HTC should be fine and this is a win for the consumer. More competition will bring more innovation. I'm very happy with my HTC Wizard...probably the best PDA I've ever had.

[beq]

Hmm, don't LG, Asus, Gigabyte, etc, all have strong own-brand presence?

[Darius Wey]

Hmm, don't LG, Asus, Gigabyte, etc, all have strong own-brand presence?

They do, though there's still room for growth. It's only a matter of time before their presence in the Windows Mobile industry is as large as HTC's.

[nd4speed]

A really big win for the consumer. This is just what the market needs; some fresh ideas, innovation, and aggressive pricing vis a vis competition. Simply rehashing/repackaging the same old cr@p is not going to do anymore.
Consumer opinion is going to matter much more now that there are other players in the game, all pining for your attention.

[whydidnt]

Certainly good news. While HTC doesn't have a monopoly of the market, they have such a large share of it, that it almost seems so. Hopefully, we'll see something other than a slightly modified 128 MB ROM/ 64 MB RAM phone edition soon. Perhaps, one of these OEM's will decide to create a "new" market, like the iPhone is attempting and shoot to deliver a more consumer oriented device that maintains the email, business functionality.

[JesterMania]

I agree largely with what's been said so far. HTC had the first-mover advantage and although they make excellent devices (with quad-band :!: ), I thought their newer devices were starting to stagnate in terms of innovation. Like what was mentioned before, it seemed like every phone was basically a 128mb/64mb/200-400mhz configuration, plus or minus a few things. I'm especially happy that the iPhone will be released because I think everybody can benefit from such as fresh design. 2007 really should be an awesome year in terms of handset innovation... 0X 0X 0X

[igreen]

It should be interesting watching things develop. HTC has never been the low cost provider to OEM/ODMs. They make good stuff and charge for it. The other companies mentioned in the article, less so. HP and other OEMs have always jumped back and forth between their OEM partners. LG is not a new provider for HP. One consideration that Digitimes didn't consider is that carriers are beginning to deal directly with companies like HTC. Such actions will prompt players like HP and iMate to seek out lower cost providers in order to compete. This will not necessarily benefit the end user in the short term. Carriers want to reduce their loss on the phones not save us any money.

[Faenad]

I suppose HTC make a lot more profit when selling their own devices under their own brand, than when manufacturing them as an OEM.
Shifting manufacturing capacity from OEM to HTC branded devices may be the best move for them.

As far as innovation goes, it's certainly a good news for the customer too.
Even if, for the moment, only Eten seems to be competing at the same level than HTC, at last on features. HTC still have a confortable edge with devices I find more stable and bug-free.

[Muntasser]

nice to see HTC releasing new products, but I have to add this warning!!!

/rant
Please do NOT buy ANY PPC with the TI OMAP 200mhz CPU. In this day and age it is unacceptable. Even overclocked to 260mhz, the performance is weak.

I speak from personal experience as an owner of the imate JAMin, aka HTC Prophet.

Unless you want to use your PPC as a glorified calendar, trust me - you will regret it! It's slow and tremendously reduces the functionality of your device.

At the very least, please play with the device or a friends one beforehand; for example try watching any video in divx.

/endrant

[inteller]

Id like to see more ODM devices on us phone carriers from Asus. Their products have always been super top notch.