HTC Corp., the beleaguered manufacturer that once ranked among the
world’s top smartphone makers, is exploring options that could range
from separating its virtual-reality business to a full sale of the
company, according to people familiar with the matter.
The Taiwanese firm is working with an adviser as it considers
bringing in a strategic investor, selling its Vive virtual reality
headset business or spinning off the unit, the people said. HTC has held
talks with companies including Alphabet Inc.’s Google, according to the
people, who asked not to be identified because the information is
private.
A full sale of HTC, which has businesses ranging from VR to handset
manufacturing, is less likely because it isn’t an obvious fit for a
single acquirer, one of the people said.
Shares of HTC rose 4.7 percent in Taipei on Friday to the highest
close in more that two weeks, giving the company a $1.9 billion market
value. The company has shed about 75 percent of its value over the past
five years as its smartphone market share dipped below 2 percent.
No final decisions have been made, and HTC may choose not to proceed
with any strategic changes, the people said. Representatives for HTC and
Google declined to comment.
The Taoyuan City-based firm has been attempting to refocus its growth
prospects on the high-end VR business, with shipments of the Vive
headset totaling more than 190,000 units in the first quarter, according
to research firm IDC.
HTC cut the price of the Vive by $200 earlier this week, in an effort
to expand product sales and its user base, which is more important now
than earnings, according to Sanford C. Bernstein & Co. analyst David
Dai.
The company is also trying to revive its smartphone unit with its
latest flagship U11 model and a contract manufacturing deal to assemble
Google’s Pixel handset.
“It’s a cutthroat Android smartphone market out there,” Ramon Llamas,
IDC’s research manager for wearables and mobile phones, said in an
interview, referring to the mobile operating system developed by Google.
“Apple and Samsung have made it hard for HTC to stay at the top of
the market, and Chinese phone makers have made it hard for HTC to
dominate the middle and low end of the market,” Llamas said.
A transaction with a Silicon Valley firm like Google would mark a
face-saving moment for Cher Wang, HTC’s co-founder and largest
shareholder, who took over as chief executive officer of the the
manufacturer in 2015. Wang has been unable to stem the losses in market
share since returning to the company in a full-time capacity. The
daughter of a petrochemical billionaire, Wang was Taiwan’s richest woman
until HTC’s stock tanked.
HTC, founded in 1997, began as a contract manufacturer. In 2002, it
won a deal with Microsoft Corp. to make Windows-based phones and quickly
became one of the top producers globally. It also made the first
Android phone in 2008.
Vive is a “different beast” from Facebook Inc.’s Oculus VR and Sony
Interactive Entertainment LLC’s PlayStation VR, Llamas said. “I am not
seeing other companies really making that play, competing in that same
area,” he said.
Read also: HTC revenues plunge to an eleven-year low
Source - TheJakartaPost
