When it comes to choosing between mobile phones and VR services, HTC has made a tough decision that has sparked a lot of discussion in the tech world. Recently, rumors about HTC selling its mobile business have been circulating, and on September 21, the news finally came out. What caught the attention of VR enthusiasts is that HTC decided to sell some parts of its phone business while keeping its VR division alive, even though the VR market is still in a slow phase.
Selling the mobile business was a smart move
HTC used to be a major player in the smartphone market, with a peak share of 10%. However, by 2011, that dropped to nearly 2%, and by 2016, it had shrunk to just 0.68%. This decline led to a 35% drop in revenue last year, the worst in 11 years, along with a loss of NTD 10.5 billion. It's clear that the smartphone market is highly saturated and competitive, making it hard for HTC to stay afloat. In contrast, the VR market is still emerging, with great potential for growth.
According to iResearch, the Chinese VR market hit 3.46 billion yuan in 2016. Though small now, it's growing rapidly—projected to break the 10 billion yuan mark by 2018. With a compound annual growth rate over 80%, the VR industry is expected to reach 79.02 billion yuan by 2021, making China the largest VR market globally.
HTC started focusing on VR as early as 2015, partnering with Valve to develop the HTC Vive. As of June 2017, the Vive sold 420,000 units, which, while less than PS VR’s 1 million, was higher than the 243,000 units sold by the leading VR headset. The Vive remains a strong contender in the market.
Tang Jianhong from Little School Technology said that HTC’s decision to sell its mobile business and focus on VR makes sense commercially. “The VR space is still young and full of energy, while the phone market is mature and not as promising anymore.†He believes this shift shows HTC’s confidence in the future of VR.
Despite the challenges, HTC has chosen to retain its VR business, showing strong belief in the industry. Although VR is facing a downturn, with some retailers reporting a sharp drop in sales, HTC continues to invest. Industry experts like Ren Fuxin believe HTC’s decision is deliberate, signaling long-term commitment to VR and related technologies like AR and AI.
Some worry that if HTC leaves the VR space, it could deal a major blow to the entire industry. After all, HTC was one of the first big names to invest heavily in VR. Tang Jianhong expressed concern when he first heard the news, saying that if HTC exits, it would be a huge setback for developers and the community.
While some companies are preparing for a potential winter by cutting costs, others remain optimistic. Ren Fuxin noted that HTC’s continued support gives developers hope and motivation. “If HTC really gave up VR, it would be a big blow to the whole industry,†he said.
As the tech landscape continues to evolve, HTC’s choices will be closely watched. Whether they can lead the next wave of innovation in VR remains to be seen, but for now, their decision to stay in the game is a bold one—and one that many hope will pay off.
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