With all the major tech companies playing with virtual (or augmented) reality, the surprise success story is Vive. Made by HTC it seemed to hit a sweet spot that the others didn’t and now they have reduced it by $200 to compete more closely with Oculus. A big (brave?) move given Oculus is owned by Facebook and heavily subsidising its price.
HTC was of course one of the early leaders in the smartphone market before losing its way. So how to not repeat this again? According to Bloomberg
, they are looking at all the options: spinning it out into a separate entity, taking on strategic investment, partnering with Google or staying as is.
HTC continues to struggle in its core mobile phone business and seems to have lost its way. It isn’t easy to differentiate yourself today and margins are thin (unless you are Apple).
Virtual reality on the other hand offers significant growth potential but for all their early success, it is not mainstream yet and asking HTC to out-innovate the big tech players head to head and year on year is a big ask. They have a pre-existing relationship with Google (they manufactured its Pixel phones last year), so working with Google on Google branded virtual reality headsets made by HTC could be an option though I think the market is still too early for such a venture.
The other challenge for HTC is that the market is focused on augmented reality right now, which HTC is not strong in, but Google is, so again there may be another opportunity to work together. Does Google really need HTC beyond manufacturing capabilities though? Other than any patents HTC owns, probably not.
A strategic investor is more likely at this point I think. Maybe HTC can do something with Softbank, who are spending plenty of money on investments today.