HTC Says It Learned A Lesson After Samsung Used Component Supply As A ‘Competitive Weapon’

May 29, 2013 - Written By Chance Miller

We all know that HTC has been struggling over the last couple of years, but when the HTC One launched, the company seemed overwhelmed with hope. However, reports started to emerge which suggested HTC was running into supply issues with the flagship device, and the company later confirmed this news. These issues presumably caused a more delayed launch for the device than HTC and its customers had expected. Recently, Jack Tong, president of HTC North Asia, gave an interview discussing how crucial supply and manufacturing partners can be when producing a device that is expected to sell millions. HTC has sold more than 5 million units so far, and that number would be much higher had it not been for the initial supply issues. Tong talked about how one bad experience early taught his company a lesson when it comes to component suppliers.

Back when the HTC Desire was released, it was a pretty popular phone. It received very good reviews, and users seemed to love it. One thing people really loved about it was the display. It was packing an active-matrix organic light-emitting diode, or AMOLED, display. Which at the time, was supplied by Samsung who hadn’t met with much success in the Android market thus far. Once the positive reviews of the device started rolling in, however, Samsung suddenly “strategically declined” to supply its AMOLED panels to HTC.

“We found that key component supply can be used as a competitive weapon,” Jack Tong told Focus Taiwan in an interview.

Tong went on to say that Samsung is very good at “vertically integrating” its supply chain and marketing, which shows HTC and other Taiwanese companies that they need to work closely with local and global manufacturing partners to develop innovative technologies.

Essentially, Tong is saying that this experience with Samsung taught HTC that they need to work on their own to develop key technologies and not rely on third-parties or competitors, because at any given time, rivals could easily yank the rug out from under them. In the end, HTC was forced to redesign the Desire handset and release it  again without the Samsung-supplied AMOLED displays.

Source: Focus Taiwan