HP and Palm Expected to Terminate Relationship with HTC

The Taiwanese manufacturer doesn't only sell HTC branded phones, but also provides phones individually customized for mobile operators and device partners. Moreover, HTC also manufactures phones for companies like Palm or HP.

HTC is currently one of the suppliers of HP's iPAQ-series handsets, but after the handset maker started heavily promoting its own handsets in mid-2006, it looks like HP will be terminating its relationship to HTC by the second half of this year. Reportedly, CMCS, and affiliate of Foxconn International Holdings was added to HP's list of handset suppliers, among other manufacturers such as Quanta Computer and LG Electronics. CMCS has received orders for smartphones from both HP and Palm, with shipments expected to begin by the end of this year.

Palm is also expected to slowly give up HTC manufactured devices, as Inventec Appliances has begun shipping Treo-series handsets and is expected to ship around 1-2 million handsets to Palm throughout this year. Apart from being Palm's largest supplier, Inventec Appliances has also secured orders from PDA and smartphone vendor I-Mate in the second half of 2006, which outsourced all of its HTC handsets.

On top of that, O2 Asia Pacific has also decided to give up doing any kind of business with HTC in 2006 and switched orders to four other companies, Quanta Computer, Asustek Computer, Arima Communications and Gigabyte's Communications.

Summing everything up, most companies are turning away from HTC and placing their orders for handsets at other Taiwanese manufacturers. With all the competition, it's no surprise that HTC's forth-quarter revenues were significantly lower, the proportion of OEM revenues to its total revenues having dropped to 20% for the quarter.

In the meantime, HTC has a whole lineup of smartphones waiting to be released, and with all its partnerships falling apart, it looks like HTC will be the only one to sell the handsets this time.