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Somewhere Samsung is celebrating

Phone carriers worldwide are passing along some bad news to their customers and the media -- HTC Corp.'s (TPE:2498) eagerly awaited flagship smartphone, the HTC One, has been delayed.  Retailers -- including Best Buy, Inc. (BBY) -- were planning to launch the 1080p Android smartphone in the third week of March, but that launch date has now been pushed back indefinitely due to a shortage in camera parts.

I. Hopes to Get a Head Start on

HTC promised its metal-body superphone would be available in 80 countries and 185 carriers before the end of March.  Now it's unclear which -- if any -- of the carriers will be able to launch in that window.

The delay could not have come at a worse time for HTC, who has struggled to compete with Samsung Electronics Comp., Ltd (KSC:005930) and Apple, Inc. (AAPL).  HTC had planned the HTC One launch to be its ticket back into the spotlight.  The smartphone would get a critical sales jump on Samsung's Galaxy S IV by a couple weeks.  An emboldened HTC even was observed talking some smack to Samsung, attacking its choice in body design for the GSIV.

Now HTC is eating a slice of humble pie.

According to an unnamed HTC executive quoted by Fox News, the shortage is due to HTC losing its preferred component buyer status amid disappointing shipments.  Wary suppliers have now limited the amount of stock they're setting aside for the struggling phonemaker.

HTC One 360 view
The HTC One

Comments the unnamed HTC executive, "The company has a problem managing its component suppliers as it has changed its order forecasts drastically and frequently following last year's unexpected slump in shipments.  HTC has had difficulty in securing adequate camera components as it is no longer a tier-one customer."

II. CEO Peter Chou May Resign Out of Shame For Poor Showing

HTC Chief Marketing Officer Benjamin Ho refused to offer details on the supplier snub or provide a firm timeline for the HTC One's release.  He comments, "We...are working tirelessly with all of our channel partners to ensure that we can fulfill as many orders as possible. We will start fulfilling pre-orders by the end of March in certain markets and will roll out to more markets as we approach April."

But an April launch is the last thing HTC wanted.  Samsung is also launching the GSIV in early April and HTC's marketing machine pales in comparison to tis rivals.

What's more Fox News reports that HTC is suffering a multitude of personnel woes.  One unnamed engineer comments,  "This was the first time that HTC didn't give out a year-end bonus...management probably wants to reserve the money to boost marketing this year."

Reportedly many of HTC's top engineers are jumping ship to rival gadgetmakers with better pay like Acer Inc. (TPE:2353), Huawei Technologies, and ASUSTek Computer Inc. (TPE:2357).

And HTC could soon be without a chief executive.  If the delay causes HTC One sales to fall short, HTC CEO Peter Chou is expected to resign, according to Fox News.  Mr. Chou reportedly told the company's top executives at a late 2012 meeting that if the flagship HTC One was not a success, he would step down.

Peter Chou
Fox News quotes an unnamed HTC executive as saying his CEO announced he may soon resign out of shame for the company's failures. [Image Source: Android and Me]

Comments an unnamed executive, "He (Peter Chou) is a proud person. It seems that he wants to hold himself accountable for HTC's decline in the last two years."

It looks what started as a trickle down the mountain could soon become an avalanche of issues for Taiwan's top smartphone OEM.

Source: Fox News



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RE: This is stupid.
By Tony Swash on 3/19/2013 9:15:32 PM , Rating: 0
The smart phone wars will fought primarily in the supply chain. The two companies currently winning that war are Samsung and Apple. Much hinges on how quickly and how successfully Apple can migrate away from the remaining supply dependencies on Samsung, and on how much that loss of Apple business effects the economics of scale (and to a lesser extent the future product pipeline and market data that Samsung secures from it's position in Apple's supply chain) adversely effects Samsung in the medium term.

As both Samsung and Apple ratchet up their production so the global supply of critical components becomes more problematic for the other players. Both Samsung and Apple have hugely increased their capital investment in the supply chain in the last few years, in particularly in the last eighteen months, and both are now investing huge amounts. Amounts that cash strapped marginal OEMs are struggling to match.

This also effects those companies trying to sell devices at cost and earn revenue via bundled services such as Google and Amazon as the pressure on the supply chain increases the costs of such strategies.


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