According to the Japanese supply chain website EMSOne, Taiwanese handset maker HTC is in the process of doing two things it’s never done before. First, it’s going to outsource some of its smartphone manufacturing to another company, specifically Compal Electronics. Two, it’s building a phone with a MediaTek chipset. That second point is especially important since Qualcomm owns a small piece of HTC. Remember that HTC tried to use a non-Qualcomm part when launching the NVIDIA Tegra 3 powered One X back in 2012, but that device flopped. Hard.

So why exactly is HTC doing this? As with everything else in life, it’s all about money. MediaTek’s chips are often said to be about as good as Qualcomm’s chip, but they’re substantially cheaper because MediaTek is just that much leaner of a company. And as for outsourcing to Compal, it means HTC has to worry less about investing in the right machinery and components, which is often a capital intensive process. And capital is about the last thing HTC has right now.

Will this cheap device be sold outside of China? Probably not, and that’s another reason why HTC is in dire straits. They’re a two faced company. The flagship phones they sell in Europe and the US aren’t really that appealing in China, meanwhile the budget phones they sell in China are often seen as uncompetitive in the West. Segmenting by price is something all companies do, but HTC seems to be rather poor at it, or at least poor at marketing why their devices are worth buying instead of something from Samsung.