HTC Denies US$40 Million Shipment Rejected By Palm
According to DigitalTimes Telecom, Taiwanese media reported that Palm rejected a US$40 million handset shipment from High Tech Computer (HTC), but HTC denied the claim yesterday in a filing with the Taiwan Stock Exchange. HTC admitted difficulties with a component but said the financial impact was limited.
According to HTC, a small portion of connectors in handsets provided to Palm had defects, and that HTC is replacing those defective connectors in cooperation with the component supplier. HTC downplayed the problem, saying that testing and replacement would only cost about US$152,000.
HTC was for a long time the main manufacturer of Palm Treo smartphones, even participating at the design table with Palm. This year HTC shocked the market by releasing a smartphone under its own brand name similar to the Treo. While Palm publicly insists their relationship with HTC is close, they use a competing Taiwanese company, Inventec, to manufacture the new Treo 680.
In our view HTC represents a difficult choice for Palm. Palm can utilize HTC, the most experienced smartphone hardware manufacturer in the marketplace, and risk sharing information that will end up in a directly competing device, or they can rely on less experienced alternative. Although Palm largely differentiates itself based on software rather than just hardware, we wonder what manufacturing choices the company will make in the future.
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Filed under: Treo and Palm news
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