Microsoft to outsource more phone manufacturing

Microsoft to outsource more phone manufacturing

An unconfirmed report by DigiTimes today states that Microsoft is planning to outsource more of its smartphone manufacturing as it closes plants in China.

DigiTimes’ unnamed source goes on to say that while Microsoft is closing its plants in China, it is ramping up production in Vietnam and planning to outsource more manufacturing to Taiwan based companies. The unnamed source says that Taiwan’s Compal Electronics is likely to become the primary production partner for Windows 10 smartphones and that:

“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….”

While we cannot verify DigiTimes reporting at this time, WinBeta did report that Microsoft’s COO Kevin Turner spoke yesterday at WPC about the changes in the Windows Phone business moving forward, including manufacturing. When speaking about the restructuring of Windows Phone post the Nokia write-off, 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 are right sizing the organization, and we are hard at work at what’s the next big wave of innovation relative to that size of device that we need to be working on and geared towards.”

With an expected more focused portfolio of phones, and, as CEO Sataya Nedella said to ZDNet’s Mary Jo Foley, not launching “a phone a day,” it would only make sense for Microsoft to be making significant changes in their manufacturing chain.

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