As a company that started life as a contract manufacturer for other companies, HTC has long prided itself with the fact that it makes all of its products in-house, in contrast with how other phone makers are outsourcing their production to specialized companies in China and Taiwan. But that’s no longer the case.
Following rumors that surfaced in September of HTC scaling down its production facilities to cut costs, the Wall Street Journal reports that HTC is already outsourcing the production of several Desire models. According to people familiar with the matter, China-based Wingtech Group is making the mid-range Desire 616 and the entry-level Desire 210, both primarily targeted to the Chinese market. Compal Electronics, whose clients include HP, Dell, Acer, and many other companies, is reportedly manufacturing another phone in the Desire range.
However, according to the WSJ’ sources, HTC is still manufacturing in-house the high-profile One (M8), as well as the Desire 816. This should appease some fans worried about a possible drop in build quality due to externalization.
Back when the rumors about outsourcing first emerged, the stock market reacted positively, as handing production over to an outside specialist is a way to reduce production costs. While HTC is an experienced and accomplished hardware maker, it can’t really compete with manufacturers that optimize their entire business for the smallest possible cost.