We don't know the exact arrangements of the deal, but both SE & HTC have made it pretty clear in interviews and reviews that it's an SE designed, SE product. Why go to HTC? Why not? SE outsource the manufacture of all their phones, and in the case of a new WM product HTC are the obvious OEM to choose.

A couple of details that I learned from talking to various people at the Sony Ericsson booth that might be of interest:They took care to emphasize that HTC didn't have a large hand in developing the hardware. “We designed it, HTC is just the ODM” was a phrase I heard twice. SE is (rightfully) very proud of this hardware and though they're utilizing HTC to do the manufacturing, they really want to make sure that they get the credit.

As for using HTC to manufacture it, my personal opinion is still mixed. HTC is very good at making great hardware and clearly has much more experience at this sort of thing than Sony Ericsson. Likely that's why SE made the decision to go with them. It's still surprising to me, however, as SE makes all sorts of phones and consumer devices and thus they likely had a lot of options. If nothing else, I see it as a testament to HTC's incredibly ability to crank out Windows Mobile devices as a manufacturer that they could beat out the other ODMs that Sony uses for their other products.

The other interesting bit is that SE developed the X1 as a “North American Device.” Most of the design and development work was done in San Diego and has a “North American mindset.” If there was any doubt that Sony Ericsson is aiming this device primarily at the US market, that doubt can now be laid to rest. SE has traditionally done much better in the Asian and European markets with their high-end phones, the Xperia X1 is clearly intended to reverse that trend

Why won't HTC release a device like the SE G900?? they always seem to hold back on something, whether it is wifi, camera quality (I mean they are only now stepping up to 3.2m quality!!)

As for using HTC to manufacture it, my personal opinion is still mixed. HTC is very good at making great hardware and clearly has much more experience at this sort of thing than Sony Ericsson. Likely that's why SE made the decision to go with them.

Manufacturing, yeah. Designing and knowing what ordinary people want (read: nice camera, great multimedia and gaming capabilities etc), nope.