HTC's custom component bet backfires as One smartphone delayed

HTC's custom component bet backfires as One smartphone delayed

Summary: HTC's supply chain bites back as the smartphone maker can't procure enough components to launch its One smartphone in time.

SHARE:

HTC's bet that it could use custom components and line up its supply chain amid declining sales has delayed its One smartphone. And the timing is terrible.

The Wall Street Journal confirmed what analysts had been saying for weeks---HTC can't get enough components to launch its comeback phone. The HTC One is the company's best hope to turn around declining revenue and regain its past glory.

htconehw03

I noted that HTC's decision to go custom with its camera parts was one of its five big blunders.

Also: The HTC One is the best smartphone I have ever used (review)

Morgan Stanley analyst Jasmine Lu highlighted the component problems for HTC recently:

Innovation becomes a risky strategy without scale: Weak Feb sales imply 1Q revenues might hit the low bar owing to weaker than anticipated sell-in strength restrained by critical component supply (i.e. actuator for its new “ultrapixel” cameras”) on our checks. This affirms our view that it is a bold move for HTC to use tailor-made components for its new HTC One, causing low yield at the initial stage of ramp up.

The HTC One was introduced in February for a March launch. The problem for HTC is that Samsung also recently unveiled its Galaxy S4 to launch in April.

HTC faces the following issues:

  • Staff turnover. 
  • HTC isn't seen as a key smartphone player so it can't push suppliers around. 
  • Declining sales hurt employee morale and have backed HTC in a corner.

These issues are unfortunate and not only for HTC. There's an opening for an Android smartphone maker to step up with a more pure version of Google's operating system. Samsung's big move with the Galaxy S4 was to relegate Android to the background, pretend it didn't exist and tout its own software innovation. That strategy may leave an opening for HTC and its One phone.

Topics: Smartphones, Android, HTC, Bring Your Own Device

Kick off your day with ZDNet's daily email newsletter. It's the freshest tech news and opinion, served hot. Get it.

Talkback

4 comments
Log in or register to join the discussion
  • More pure version?

    "These issues are unfortunate and not only for HTC. There's an opening for an Android smartphone maker to step up with a more pure version of Google's operating system. "

    Sony is the only android smartphone maker that doesn't b*st*rd*ze the android OS with custom skins, and leaves it near vanilla(they do add some icons, but that's about it). HTC's Sense UI is hardly, nay, isn't even remotely close to stock android in terms of functionality/looks.
    icyrock
  • Isn't the Nexus 4 that phone?

    You wrote...

    "There's an opening for an Android smartphone maker to step up with a more pure version of Google's operating system."

    I purchased a Nexus 4 in large part because I thought the Android platform developments would be pushed to my phone promptly. Such has been the case in the short time I've had it.

    As one who purchased 'branched' tablets (i.e. Amazon Kindle Fire), I decided that both tablet and phone from the platform owner made more sense. While the desing of the HTC looks very nice, the Nexus 4 was the best choice for me.
    Peter Sabin
    • History is Not There

      The only smart phone out there with a long history of consistently putting out updates to their customers, who provides a pure experience without ridiculous UI overlays is iPhone. In 2010 when I purchased the original Google Nexus Phone (which at the time was made by HTC) I bought it because they said it would always get the latest updates. I was so excited!

      I got my Nexus phone and within a few weeks it sent me a message saying that the upgrade to Gingerbread was available. So I downloaded it, so happy! So Honeycomb comes out and I'm like, yay! I'm getting Honeycomb! Only to find out, nope, sorry, Google isn't making Honeycomb available for my Nexus. In fact, that was the last update for Nexus owners. Same happened with my HTC Amaze.

      Lesson learned, you can expect one or two updates at the most with an Android phone, but eventually you will get cut off. I could have bought a iPhone 3GS and received all the updates for iOS up until today's version iOS 6.
      Maha888
      • old hardware always gets cut off eventually

        Even Apple. Can you get iOS 6 on a first-gen iPhone? OS X 10.8 on a PowerPC Mac? Sooner or later any s/w has to drop support for older h/w, it's the nature of the beast.
        frylock