Business

HTC lowers phone production, but denies it’s shutting down factories

HTC One

Above: HTC One

Image Credit: Sean Ludwig/VentureBeat

In today’s episode of As the Mobile World Turns, things are once again looking bad for HTC.

The Taiwanese smartphone maker, once the top Android manufacturer, has reportedly halted device production from “at least” one of its four major manufacturing lines, according to Reuters. But the company was quick to respond to that report, claiming that it’s not shutting down or selling any of its factories.

It’s a familiar back and forth that we’ve seen from other troubled companies like BlackBerry. A Reuters reporter saw that one of HTC’s factories in Taoyuan, Taiwan had its lobby and loading bays closed, which seemed like a clear indication that the factory itself was closed. Sources also tell Reuters that some of HTC’s Shanghai assembly lines were also closed and that the company is considering selling its unused production lines.

In a statement to the news agency, HTC noted:

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 just be a question of semantics. Ben Ho, HTC’s chief marketing officer, tells Reuters that HTC has to “do volume planning to optimize our lines, our manufacturing and production facilities,” like most other manufacturers. Even though the facilities themselves are closed, HTC may not actually consider the factory officially “shut down.”

In either case, HTC is in serious trouble. Earlier this month, it reported a first-ever operating loss of $119 million, which followed several quarters of consistently poor performance. It has a killer smartphone offering with the HTC One, but it’s getting beaten in sales by Samsung’s Galaxy S and the iPhone.

HTC just kicked off a $1 billion marketing campaign starring Iron Man actor Robert Downey Jr., which could help make people more aware of its phones. But I’m not sure that campaign will be enough to turn HTC’s fortunes around very quickly.

Earlier this week, the Financial Times reported that HTC could end up manufacturing Amazon’s future smartphones, which could give it a reason to start running those shuttered production lines again. There’s also a chance that HTC could split up its manufacturing and design arms, one source noted.

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