ODM contracts return to HTC, i-mate in serious trouble?

[Guest Paul (MVP)]

Well well, it's definitely a case of 'happy days' over at HTC! Not only is their own-brand retail operation running away with the Windows Mobile market, now their former bedfellows Palm, MWG (formerly O2 Asia) and i-mate are apparently returning cap in hand to resurrect their ODM relationships!

According to an item over at respected Taiwanese news site Digitimes, the resurrection of these relationships has helped boost HTC's ODM revenues, which are sitting at a shade over 10% of their overall business (actually a lot less than I expected)! The same article also states that 'the company plans to launch 10-12 new handsets this year'. Should keep us busy :)

In related news, it seems that things have gone from bad to worse at i-mate, the Dubai based company founded by Jim Morrison that is now a shadow of it's former self and seemingly in dire straits. From the Financial Times...

I-mate has put itself up for sale after further problems with its suppliers resulted in a second heavy profit warning this financial year.

The Dubai-based mobile phone maker said a main chip supplier, believed to be Qualcomm, had failed to supply manufacturers with the required volume of chips over the quarter.

The same supplier also lost a recent court ruling over intellectual property infringements resulting in I-mate being unable to sell its full range of devices in the US, it said.

The shares slumped 12¾p to a record low of 20¾p, a far cry from the listing price of 210p in 2005.

I-mate forecast the impact on sales to be “material” in the final quarter to the end of March.

Jim Morrison, chief executive, said that while I-mate had devices that were not dependent on the chip set, “it has a significant impact on the range of product we have to sell. We have no alternative but to review the strategic options for the company at this time”.

Oh i-mate, where did it all go wrong?

Looking objectively, it's pretty plain to see that things went pear-shaped just as soon as reselling HTC devices no longer formed part of the i-mate strategy. But to be honest, i-mate aren't the only ones to have suffered at the hands of other (less experienced?) ODMs. Toshiba, UBiQUiO and others have all suffered with products that haven't lived up to their potential having been plagued with software issues, delivered late or not delivered at all. It seems like these ODMs have to raise their game considerably to keep up with HTC, and perhaps this year we will see if that is going to be the case, and that may be key to i-mate's survival. Interestingly, Eten / Glofiish seem to be doing a pretty good (and improving!) job, so it can be done...?

Competition in any industry is key, and so we wish everyone the very best, and I hope i-mate can either find a suitable buyer or come out the other side of their current troubles.

P

[Guest Monolithix]

The other point you missed Paul is HTC are the only company there to have WinMo devices sold at subsidised prices through network operators. Honestly, i can only speak confidently about the UK market, and the fact that customers do not expect to pay for handsets *at all*, but i would imagine (and as seems to be the case) that this goes for other major markets too (Europe/US/etc). It's taken HTC more than 5 years to get to where they are, and to be honest, i'm not surprised other ODM's are struggling.

In the case of i-Mate, presumably having a strong hold of the richer (or less network-subsidy orientated market maybe...) middle-eastern market allowed them to "get away with it" in terms of full-priced handsets. Unfortunately it looks like they took a gamble at dropping HTC and it didn't play off! Inadequate chip supplies? I don't see a single other manufacturer struggling! And with the Qualcomm import ban in the US i'm sure they have plenty of spare chips knocking around :)

[Guest sxywill2005]

I heard it wasn't Qualcomm, but TechFaith Wireless not suppling the goods on time or to standard.

Hmmmmm.... i-mate may be a good stock to buy at that price and if they want to be bought up fast. Any predictions? I bet you it will be some Asian handset manufacturer or network operator that buys them out.

[Guest Paul (MVP)]

I can't really think of an i-mate suitor off the top of my head, so i'm a little bit wary about the idea of buying up stock myself.

I'm not really sure what buying i-mate brings? I'm no expert of course :)

Check out this graph:

http://www.advfn.com/quote_I-Mate_LSE_IMTE.html

P

[Guest Paul (MVP)]

LONDON (Thomson Financial) - i-mate PLC said it is reviewing strategic

alternatives for the company after one of its leading chip suppliers failed to

supply its manufacturers with the required volume of chips over the final

quarter.

The group, which makes Microsoft Windows-compatible mobile devices, also

said a recent court ruling against the same chip supplier over intellectual

property infringements means i-mate will not be able to sell some of its

products in the US.

These events will significantly disrupt its strategy for the US market and

its Microsoft channel roll-out, i-mate said.

i-mate added there will be a material impact on sales in the final quarter

and it will consequently have to write off costs.

"This is hugely disappointing for the company and, although we have devices

which are not dependent on this chip set, it has a significant impact on the

range of product we have to sell," chief executive Jim Morrison said.

i-mate is evaluating the precise financial impact for this financial year

and beyond, it added.

Isn't this the same chipset (potentially) that HTC are succesfully shipping in the US?

P

[Guest Paul (MVP)]

Interesting reading...

http://www.advfn.com/p.php?pid=nmona&c...symbol=L%5EIMTE

particularly, in the chairman's statement:

Our stated strategy remains clear:

*Design and innovate Windows-based smart phones and PDAs that are best of

class

*Execute an effective sales strategy, and

*Continue to develop the i-mate brand

The launch of our Ultimate range of devices has already resulted in the award of

the industry accolade of "Best of CTIA 2007 - Best Smartphone". The first two

Ultimate devices, the 6150 and 8150, have now been sold into our various

commercial channels with positive feedback coming from our customers. With two

additional Ultimate devices, the 8502 and 9502, and two JAMA devices, the 101

and 201 now coming off the production lines, our new range of 6 unique i-mate

devices coupled with our enhanced suite of services gives the Group a great

opportunity to re-establish its position as the market leader in Windows-based

smart phones.

Hmmmm....

P

[Guest Monolithix]

Were the Ultimate devices ODM'd through TFW?

[Guest Paul (MVP)]

No, they're with someone else.

P

[Guest Knocksock]

No, they're with someone else.

P

Info: i-mate have been threated badly by HTC from early morning, making their choice to either stick to HTC made devices or try others like TFW, Inventec..both companies wanted to split up based on their strategy to provide distinct products to the market.

i-made did bad decisions choosing TFW and other "unknown" companies. Old models like i-mate K-JAM (HTC Wizard) and other WM5 devices is long time out of production. HTC not supplying spare parts in acceptable time. But, when these products are "out of use" by customers I believe i-mate have made a very good choice when using Arima and MobiNova for their Ultimate products. 6150, 8150 + 8502 and 9502 being very good devices! i-mate need to work with their time from launching to device is available for sale.

That said, in my opinion one can't really say one device is better than other. My experience is that HTC devices have many bugs and the hardware build is not the best. i dislike the Touch models design and TouchFLO is in my opinion not any revolution as is right now. Got to have new OS to be that :-) Why do people buy HTC? because they are easy to spot in shops/Internet, marketing is done properly, the stocks are refilled and customers need are so different. Other companies should start working more professional :-)