updated 06:55 am EDT, Mon April 23, 2012
HTC said to be developing chips with ST-Ericsson
HTC is reported to be partnering with ST-Ericsson in order to co-design mobile chips for its low-end devices. The China Times says that HTC and ST-Ericsson have signed a 'memorandum of cooperation' and that the first chips should start to ship in 2013. If accurate, the development would help to put HTC on a similar footing to Apple and Samsung which design their own mobile chips enabling better product differentiation.
ST-Ericsson, like Apple, is a fabless chip designer outsourcing production to outside companies. HTC is no stranger to chip design either, having developed its own Image Chip that is utilized in its latest One-series line of smartphones to help enhance their photographic capabilities. HTC has also previously signaled that it would shift away from its sole reliance on Qualcomm processors in recent times.
Samsung, which also fabricates its own chips, as well as chips for Apple and others, is a prime example of a mobile maker that has benefitted from a diverse range of suppliers for its CPUs. While Samsung has designed and manufactured proprietary chips for its own product differentiation purposes, it has also delivered a number of devices with chips sourced from companies including Qualcomm and NVIDIA among others. The strategy has enabled it to respond quickly to various market opportunities and deliver a diverse product lineup.
HTC has also previously focused on the high-end smartphone segment, where Samsung is currently the leading Android maker. A renewed emphasis on the lower-end may also help HTC's bottom line and help foster longer term brand loyalty. Further, by utilizing its own designs, it may have room to enjoy better margins while tackling a segment that has notoriously tight profit margins. [via Unwired View]