Rumor: HTC Reducing Component Orders By 30%

Competition and consumer tastes are fickle animals and of the smartphone manufacturers, HTC are very aware of this. In recent years, their flagship devices have varied from loved by the industry to almost being shunned. In many respects, 2012, the HTC One X was not the sales success that many believed it should have been. HTC followed the One X up with the One X+, offering a higher performance processor and 64 GB of internal storage. In 2013, HTC introduced the One M7 device, which was one of the best Android devices of the year despite some indifferent component choices compared with the competition. For 2014, HTC introduced the One M8, which was in an improvement over the M7 in many respects but still had a couple of strange entries in the specification sheet. And now that we are in 2015, HTC's fourth generation One-branded device, the One M9, has been introduced and again there are some rather strange entries in the specifications. The device also looks very similar to the One M8, but whereas say Apple and Samsung can pull of this marketing illusion ("it's the same but somehow much better"), HTC do not have the financial clout to afford the sky high marketing budgets of the competition.

Instead, the HTC One M9 is in danger of becoming an also-ran. Yes, it has a new generation 64-bit Qualcomm processor, the Snapdragon 810 which has eight processor cores but also unfortunately runs hot enough that is frequently under-clocked to prevent the device from being uncomfortably warm to handle. It has a 5.0-inch, 1080p resolution display, but flagship devices are (rightly or otherwise) moving to an even higher resolution QHD display or 1440p. There are other issues with the One M9's display: it isn't as bright or colorful as many would like and this has a greater impact on customer experience than resolution. And finally, the rear camera is a Toshiba 20.7MP component rather than the Sony 20.7MP unit, which many reviewers have found to be a lesser sensor. In isolation, the One M9 is a fine device but compared with the newer models from the competition, especially Samsung, HTC's flagship did not turn out to be quite the device many in the industry were hoping for.

This is reflected by poorer than expected sales and according to sources in the Taiwan's handset supply chain, HTC is reducing component orders by 30%. HTC have declined to comment and we would not expect them to discuss the matter, but it stands to reason that if the One M9 is not selling as well as had been anticipated by the business, they would need to be in discussion with component suppliers to reduce orders to avoid having a glut of smartphones that they have built with no customers. It does not help that HTC appear to be dividing up their handset selection; the One M9 is purported to be the flagship device, but has been joined by a number of other devices for different markets with an equivalent or higher specification. Luckily, customers of one particular market can (usually) only buy one particular HTC flagship device.

Where now for HTC? We may see the company offer a revised, improved M9 in their core (Western) markets later in the year, similar to the HTC One X and One X+. We might see a different processor and more internal storage, but otherwise similar specifications. Or weaker than expected sales may make the company vulnerable to a takeover from a competitor and we have seen rumors of other businesses linked to HTC. Still, HTC still has its mid range models, which it has been steadily working over. Perhaps the M9's indifferent specification highlights that HTC are conceding that they cannot compete with the expensive high end manufacturers (read: Apple) in the same game and are so playing into the mid range market? That remains to be seen but it will put them into competition with manufacturers such as Motorola and Xiaomi. Perhaps for 2015, HTC is going to be stuck between a rock and a hard place?

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About the Author

David Steele

Senior Staff Writer
I grew up with 8-bit computers and moved into PDAs in my professional life, using a number of devices from early Windows CE clamshells and later. Today, my main devices are a Nexus 5X, a Sony Xperia Z Tablet and a coffee cup.
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