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HTC denies shutting down smartphone production lines

Word has it that HTC is curtailing production in one of its factories and reducing smartphone output by 1 million, but the Taiwanese phone maker says that's not the case.

The HTC One (right) and the HTC One Mini (left). Josh Miller/CNET

A Reuters reporter recently took a trip out to one of HTC's factories near Taipei, Taiwan; instead of finding full-scale smartphone production, the reporter found shuttered loading docks and a note tacked on a locked lobby door that read, "Lobby is temporarily closed for use. Thank you for your cooperation."

After inquiring with some inside sources, Reuters reports that HTC is most likely shutting down one of its smartphone production lines. If true, this could be another walloping blow to the beleaguered phone maker.

When contacted by CNET, an HTC spokesperson said that the company is not shutting down a factory and has no such plans.

"HTC is not shutting down nor does it have plans to sell any of its factory assets," the spokesperson said. "HTC has a very strong balance sheet and will provide the latest financials in our upcoming earnings call to investors and the broader community."

Reuters got the same reply from HTC, but two of the four inside sources that talked to the news source said that the phone maker had combined two production lines into one. This downsizing is said to reduce capacity at the site from about 2.5 million devices a month to about 1.5 million. The sources also said that HTC was possibly looking at selling the out-of-use production line.

After years of strong sales momentum, HTC has recently suffered a drop-off in sales. Its flagship HTC One has so far failed to revive the struggling brand in the face of fierce competition from Apple and Samsung.

Earlier this month, the Taiwanese handset maker reported a net loss of NT$2.97 billion ($101 million) in the three-month period that ended September 30. This was its first quarterly net loss since going public in 2002. That loss stands in contrast to the net profit of NT$3.9 billion the company reported for the same period one year ago.

In an effort to regain market share, HTC's CEO Peter Chou announced on Sunday that he would be focusing more on innovation and product development and handing off some of his other duties to the company's chairwoman and founder Cher Wang.

"I have become very focused in the past couple of months. Before that I was too busy," Chou said in an interview with the Financial Times. "I took on too many things. I need to be more focused on innovation and [the] product portfolio."