HTC selects Celestica as contract supplier for foothold in Latin America

The Taiwan-based High Tech Computer Corporation, a world-class supplier of mobile phones, has already signed a contract with Canada's Celestica Inc., an electronics manufacturing service (EMS) company, to have the latter's Brazilian plant supply its products starting next year to penetrate the Latin American market, according to company sources.

Facing a high tariff barrier in the Latin American market, most Taiwan's handsets suppliers, which boast ample capacity and are unwilling to outsource production, can't help but build their own plants or work with EMS companies locally to penetrate the market.

Thus, this is also the first time for HTC to outsource mobile phones, when the company, which hasn't had any plant sited abroad, once planned to set up an own manufacturing plant in Honduras in September.

It was reported that HTC already announced cooperation with Celestica, with the latter to set up a plant in Brazil to produce PDA phones and smartphones for HTC. In fact, however, Celestica had started manufacturing HTC's phones on a trial basis since last October.

At the moment, HTC outsources seven models out of nine sold in the Latin American market from Brazil, which are mainly for sales in the Brazilian market. Furthermore, Celestica will start to produce handsets for HTC to sell in other markets in Latin America.

Cesar Keller, HTC's director in charge of sales in Latin America, noted that mobile phone sales in the Brazilian market amounted to about 30 million units in 2006, with 1% or 300,000 smartphones and PDA phones adopting Microsoft's operating systems. He projected a penetration rate of those models in the market to move up to 1.5-2% this year and 3-4% in 2008.

source & copyright: CENS