HTC Corp. to handle component supply bottleneck: Merrill Lynch

In a note to clients dated March 14, the bank said that HTC is launching the HTC One in phases to manage the supply of components, with the United States, United Kingdom, Taiwan and Germany being included in the first phase in March and the second phase starting in April.

“(HTC's) management is aware of the bottleneck in component supplies last year and said it has learnt its lesson,” Merrill Lynch analyst Robert Cheng said in the note, referring to the quality issues surrounding the HTC One X flagship model.

When the HTC One X was unveiled in February 2012, it appeared promising based upon various reviews from professional tech blogs and HTC's operator partners.

Within the first few weeks of the product hitting the market, however, there were enormous consumer complaints about the phone's quality, including a yellow spot in the display, extremely short battery life, hardware overheating and software instability.

Separately, Cheng said that investors also expressed concerns over consumers receiving a 4-megapixel camera on the new HTC One in light of the competition from handsets made by other vendors offering 8- to 13-megapixel cameras.

He said HTC's management stresses that “consumer education” is the key to turning around the perception that “better photos do not necessarily require higher pixels.”

Given the surging demand from mobile carriers for the HTC One after its launch in February this year, Cheng believed the majority of HTC's shipments in March would come from the new device and that its sales to consumers would be reflected in the next two months.

Meanwhile, Ben Ho, chief marketing officer of HTC, said March 15 that HTC is now targeting “techmaniacs,” or tech-savvy consumers, who crave new features and designs.

The Taoyuan-based company will focus more on portal websites, social networking, bloggers and through other digital media to strengthen its communications with the 1.1 billion techmaniacs across the globe, Ho said.

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