When Microsoft’s Chief Operations Officer Kevin Turner said “We’re changing our manufacturing processes, we’re modernizing those and making them contemporary, we’re changing some of our go-to-markets, and using multi-tiered distribution,” we wrote:
“I assume the earlier part of the statement is about offloading production to ODMs like Foxconn and Compal, necessary after the deep cuts to Microsoft Mobile’s manufacturing capability worldwide.”
Now Digitimes’s “industry sources” has suggested as much themselves, writing:
Microsoft has closed its China-based handset manufacturing plants in Beijing and Dongguang, a move which will pave the way for the company to increase outsourcing of smartphones to Taiwan-based handset ODMs…
Taiwan-based Compal Electronics is likely to become the primary production partner for Windows 10-based smartphones as Compal has profound expertise for the development of Windows phones, indicated the sources.
Other Taiwan-based ODMs, including Foxconn Electronics, Wistron and Pegatron may outpace rival companies in China in the race to gain more orders from Microsoft due to their design, R&D and production capability, the sources commented.
In addition they also expected Microsoft to ramp up production at its plant in Hanoi, Vietnam, due to the low production costs available in the country.
Compal has produced popular handsets such as the Lumia 800 and Lumia 625, and has also been involved in iPhone and iPad production suggesting high build quality should not be an issue, and this would of course give Microsoft a lot of flexibility regarding volume of supply should the handsets either be more or less popular than expected.
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