By: Gigaom
October 23, 2013 at 09:46 AM EDT
HTC pushes back against allegations of production shutdowns
The media has reported that HTC has shut down a production line, but the Taiwanese company begs to differ.

Now, it’s not a stretch to state that 2013 has been a rough year for HTC. The company posted its first quarterly loss this month, as sales for its flagship HTC One couldn’t continue to support a sagging production schedule and a weaker brand compared to Samsung and Apple. But it’s not shutting down a production line, contrary to a report from Reuters.

Citing “sources with direct knowledge of the situation,” Reuters alleges that HTC has shut down one of its four main manufacturing lines, and that portions of factories (for example, the lobby) have also closed. The smaller production lines hint at decreasing manufacturing volume month-to-month, which, according to those sources, is a clear sign that HTC can’t hold its own. A corroborating report from the Wall Street Journal posits that the shutdowns are leading HTC to consider outsourcing its production.

However, the company itself has spoken up against the allegations to deny any trouble on the production line. The statement makes the state of the company’s production lines quite clear:

“HTC is not shutting down nor does it have 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.”

In addition, the company attributed the lack of personnel staffing a factory lobby — a clear anecdote brought in to highlight the factory’s ghost-town status — as a natural ebb and flow of production lines during manufacturing periods.

So where does the truth lie? It’s hard to know for sure, but it will likely reveal itself as production of the HTC One Max gets into full swing: While HTC can be adamant that no production lines have been affected, the unit output won’t lie. Furthermore, if HTC’s smartwatch is more than just a fleeting rumor, the company may benefit in doubling down on it. But there’s still blood in the water at the company, and it will need to do its best to bring media attention away from the production lines and back to the actual products.


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