HTC is reportedly planning to spin off or sell its Vive division, according to Bloomberg. The Vive VR hardware could prove to be the most successful and valuable part of the company; therefore, selling off the business comes as a surprise.
Which company will buy the Vive division?
Last year, HTC gave away the controlling rights of its Vive division to a wholly-owned subsidiary, and now, the company reportedly plans to sell the division. For now, analysts believe that the Vive spin-off is a long shot with no surety that a deal will actually go through.
One potential buyer for the Vive could be Valve, suggests BGR. Both Valve and HTC teamed up on the Vive almost a year ago. Vive holds about a 60% market share of Valve’s Steam gaming marketplace, further fueling the possibility that Valve may consider buying Vive.
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Though Valve is not known for making very high-profile acquisitions, the company is rich in cash, thanks to its PC gaming digital store. According to analysts, Valve’s yearly earnings are somewhere in the range of $700 million and $1 billion.
According to Bloomberg, HTC is also considering selling the entire company, but sources told Bloomberg that this will be less likely, as it could be hard to find a single buyer for the whole business. An easier option would be selling its smartphone division and VR unit to two different companies.
Can HTC make a comeback?
Once a pioneer in making some of the best smartphones in the world, HTC has seen its market value shrink by over 75% over the past five years, according to Bloomberg. HTC had more than 10% of the smartphone market once, but now, it has been reduced to a meager 0.6% share, according to TrendForce (via Forbes).
Just when everyone thought that HTC would be a thing of the past, the company expanded into virtual reality and introduced the Vive to the world. Since then, HTC has gained a strong foothold in the virtual reality space. Recently, there was a $200 price cut on the HTC Vive, after which the headset was available for $599, although it was still more expensive than headsets made by rivals. When asked about the discount by TechRadar, HTC Vive European General Manager Paul Brown said it was a “strategic decision” rather than an upshot of reduced manufacturing costs.
Meanwhile, HTC is working toward making its smartphone division profitable again. The company recently launched its flagship U11 and also won a contract manufacturing deal to assemble Google Pixel’s handsets. However, the deal may not prove to be enough to save the sinking ship.
Ramon Llamas IDC’s research manager for wearable and mobile phones, told Bloomberg, “It’s a cutthroat Android smartphone market out there.”
Both Apple and Samsung are driving HTC toward the edge, and Chinese manufacturers are also raking up major shares in the middle and low-end of the market, the expert said. Llamas is, however, upbeat about the Vive, stating that it is different from Sony’s PlayStation VR or Facebook’s Oculus VR.
“I am not seeing other companies really making that play, competing in that same area,” Llamas said.