HTC May Spin Off or Sell Its Virtual Reality Business

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In the early days of Android, HTC carved out a significant space for itself. It brought the first 4G-capable phone to the US (the HTC Evo 4G) and back in 2011 it actually held more market share (24%) than Samsung (21%) or Apple (20%). Over the past six years, however, the company has taken a hammering. Samsung and Apple now dominate the US market with Apple holding a 44.6% market share and Samsung at 28%. (Android phones collectively have more market share than Apple, and Samsung’s share of the worldwide market is significantly larger than Apple). HTC, in contrast, has fallen to just 2.3% of the US market and is typically grouped with “other” in the worldwide phone business. The company has been losing money for years, and has yet to stem the tide of red ink.

Bloomberg reports that HTC is considering selling off parts of itself, including its VR business. The HTC Vive has been the one bright spot in the company’s portfolio — while it serves as the contract manufacturer for Google, that work does nothing to help HTC build its own brand. Nobody who thinks about buying a Pixel thinks of it as “Google Pixel by HTC.” It’s just the Google Pixel. The Vive, on the other hand, is a foray into what analysts and tech companies are hoping is a brave new frontier in entertainment.

IDC-Marketshare

In a report earlier this summer, IDC broke down market share and estimated sales across the VR/AR market. Untethered VR like Samsung’s Gear VR sits at the top of the market, with 21.5% share, followed by Sony (18.8%), HTC (8.4%) and Facebook (4.4%). These figures were all measured in Q1 and so don’t include the impact of Oculus’ massive sale or the recent price cuts on the HTC Vive. But they do show HTC racking up very solid sales in what is traditionally a low quarter, with 191,000 VR headsets sold.

Currently, roughly two thirds of VR sales are for so-called “screenless” VR systems like Samsung’s Gear VR, while roughly one third are for headset units like the PlayStation VR, Oculus Rift, or HTC Vive. HTC’s larger share of this space could make its VR unit potentially profitable to a would-be buyer, but it’s also likely the company’s healthiest division. There’s no sign that HTC will be able to recover its previous market share — it’s squeezed at th e top by Samsung and Apple, and at the bottom by Huawei and ZTE. The company has continued to release phones, but it has had little luck in generating brand discussion or excitement. The Vive is the closest thing HTC has to a killer product, but according to Steam, the number of people using an HTC Vive on the service has been static for months. Given that HTC is still selling its hardware at a brisk pace, this implies that either people are setting VR aside once they played a few games and waiting for more content to arrive, or that the company’s sales are coming from companies other than Steam. IDC does note that the Vive has been popular in VR cafes, which are apparently popular in Asia, and that HTC has launched its own app store and subscription model. If Vive is selling heavily into the Asian markets, it would explain why its Steam figures haven’t changed much.

ExtremeTechGaming – ExtremeTech