The "High Tech Computer Corporation", better known as "HTC" has signed a deal with ST-Ericsson to make their own dumbphone chips. It will be a departure from the past, since competition is getting stiff. HTC is not doing so well in the economic department and outsourcing their chips may be a solution to the problem. Their rival, Samsung has done this and now they are the number one manufacturer of smartphones in the world.
But this is not going to be for HTC smartphones. They will be making the chips for their feature phones. A report by the China Times says that HTC will be putting their new creations into their low-level handsets when production starts next year. The reason for the switch may not just be economics. HTC is a big customer of Qualcomm from Taiwan. They are not the only customers. The Qualcomm chip maker has been experiencing shortages lately and unable to keep up with global demand. This is being quoted as the reason why some models of smartphones, such as the "iPhone 5" are being delayed. It is ironic, because both HTC and Qualcomm are based on the same island.
You will remember ST-Ericsson as the "other half" of Sony Ericsson, or at least they use to be. The "Ericsson" part of the business equation was cut out by Sony. It is hoped that the new alliance will bring HTC out of their current slump. HTC runs the Google Android mobile operating system in most of their smartphones. Ever since the last iPhone came out, their mobile traffic share has been headed downward. Some ad networks say that the ad traffic for HTC products has gone down from 18 percent to seven percent. This was from the Fall of 2011. Apple' share increased during the same time period. Samsung and Huawei also have had incremental growth, and they run the same Android software.
The growth in mobile seems to have caught a lot of companies by surprise. The company that markets itself as, "quietly brilliant", will need to begin to lower their prices to match those of Huawei and ZTE. This deal with ST-Ericsson should help them to do that.