Google IO 2017 Coverage

HTC looking to outsource phone production due to decreasing demand

HTC

If you’ve taken a few economics courses, you know all about how cost curves work. I won’t get down to the nitty gritty, because, after all, this isn’t an economics site. All you really have to know is that as production output shrinks, the cost to produce goods gets higher per unit.

As you probably know by now, HTC isn’t selling too many phones these days. Because of this, they have to manufacture less phones so they don’t end up with a surplus. However, if they were to produce less devices at their current factories, the costs for producing these devices per unit increases too much for the company to make a worthwhile profit.

It seems like the only option now is to outsource— which is exactly what they’re about to do.

According to the Wall Street Journal, the company is currently in talks with contract manufacturers to outsource smartphone production: FIH Mobile Ltd., a unit of contract manufacturer Foxconn, and Wistron Corp.

For the first time in a long time, I’ll go ahead and applaud HTC for being a bit more realistic about their future outlook.

It isn’t a power-move that’s going to put them at the top of their game again, but it’s certainly a move which will keep them away from bankruptcy, at least for the time being.

Source: Wall Street Journal


About the Author: Harrison Kaminsky

Harrison is a senior at the University of Pittsburgh completing a major in communication and a minor in economics. Aside from writing for TalkAndroid, he is the managing editor at The Pitt News, a digital marketing intern at Buzzhoney in Pittsburgh, founder and owner of MarketGong.com He's currently using an HTC One (M8) and Nexus 7 (2013). Harrison is excited for the next release of Android, and for whatever the future holds for the tech world. Tweet him at @Harry_Kaminsky.


  • crhylove

    They’re not selling phones because their phones are WAY overpriced. Fast nickels is econ 101!

  • RTWright

    Deceasing? O.o

    • Harrison

      Sales are deceasing AND decreasing. ;)