While rumors are nothing new within the corporate world, today’s rumors coming out of HTC seems to have legs. The rumor that HTC will be spinning off their virtual reality division, including their flagship product the Vive, which started months ago, has bubbled back up to the surface after the company announced today the launch of a new firm for the purpose of technological innovation.
While the company has not officially stating that this new firm would be used as a vehicle to separate their virtual reality business from their main smartphone business, such a move seems to make a lot of sense in some respect. HTC has for years concentrated the bulk of their efforts within the smartphone space, and with a 60 billion+ market cap, the company certainly has succeeded in becoming a tech giant in their own respect. The HTC Vive has gotten off to a torrid start in terms of sales and user feedback, and HTC seems incredibly bullish on virtual reality technology in general. In fact just last month Wang Tsung-ching, head of Vive at HTC China, predicted that by 2020 the VR headset market could surpass that of the smartphone handset market. While such a lofty prediction seems far-fetched, it shows just how excited the company is about the market in general. While some within the company likely want to invest heavily into R&D for virtual reality technology, their board of directors may be holding them back to some extent, wanting executives to continue to focus on smartphone sales as their main driver for growth.
By spinning off their VR unit into a separate entity, that entity could raise capital and expand in any way they wish, while the main HTC entity would be unaffected. Having the entire VR division operate independently from their corporate overlords could equate a more efficient and robust business model for that division, while leaving the main smartphone business untouched.
Rumors have suggested that the new company, which may have been set up under the HTC umbrella months ago, already houses the bulk of HTC’s VR assets and is being run by HTC Chairwoman Cher Wang. According to government data coming out of Taiwan, HTC founder Cho Ho-tu and Wang’s husband Chen Wen-chi are also on the board of this new entity, with offices located on the eighth floor of HTC’s headquarters in New Taipei. While it can not be confirmed that this new company actually has the bulk of HTC’s VR assets within it, the likelihood of such a setup seems quite high given the circumstances.
With bullish sentiment coming from all directions related to the VR market, there is likely to be major changes coming within numerous companies in regards to their interest in the space. Let’s hear your thoughts on the prospects of HTC spinning off their VR division in the HTC VR Spin Off forum on VRTalk.com.