HTC (the makers of the HTC Vive VR headset) is experiencing no shortage of troubles, according to this report from Engadget:
HTC can’t catch a break. The company has announced that in June its sales fell “nearly 68 percent,” according to Reuters. Earlier this week, the company revealed it would cull some 1,500 employees from its Taiwan manufacturing division in its chase for profitability. The last several years haven’t been kind to the company, rife with reorganizations (including one earlier this year), key staff members resigning and desperate efforts to put money in the bank by seemingly any means possible — including selling its Pixel team to Google for $1.1 billion.
Recently, the company combined its virtual reality and mobile divisions in an effort to refocus. Given this week’s news, and the Pixel sale as evidence, it wouldn’t be surprising if, in a last-ditch effort to return to profitability, HTC sold its Vive team to Valve. The two worked closely on the device, and it’s not like Valve’s coffers will run dry anytime soon.
Where would that leave HTC though, like BlackBerry? Vive is the company’s last stand, from the looks of it, and selling it off sounds like a Hail Mary. More than that, pulling a BlackBerry only works if the handsets HTC produces capture the market, something that hasn’t happened in years. And unlike BlackBerry’s keyboards, HTC doesn’t have one defining feature, let alone two (a reputation for enterprise-grade security). The new reduction in headcount probably won’t have the same financial benefits of the Pixel sale, but we’ll have to wait for HTC’s next earnings report to know for sure.
Which raises the question: what happens to the HTC Vive if HTC folds? It’s unlikely they would shelve the prodcut (as the article mentions, they would probably land up selling the Vive to their partner Valve), but if it does happen, it would leave us with one fewer option for high-end VR headsets.
Given the fierce criticism that the company has received over the expensive pricing of its new Vive Pro headset, in addition to all the other bad news at HTC, it seems possible that they may shut down. A sales drop of 68% is a serious problem. Can HTC survive?
What do you think? Please leave a comment with your thoughts. Thanks!
UPDATE: Michael Siebielec commented on Facebook:
If Vive folds it would send a shockwave through the VR investment community which I believe is on thin ice already. With only Microsoft and Facebook, two big profit only centered corporations that will drop VR in a heartbeat if it doesn’t grow more rapidly from a niche to a billion dollar cash cow in a year or two as those original rosy projections have all soured. Sony only sees VR as a toy add-on that isn’t performing high enough for them to tout enthusiastically at E3 very loudly and MS has no plans for VR on the XBOX One. I love VR but can see it going the way of 3D TV quickly with the next and coming economic downturn. Look how quickly Sony dropped 3D cameras and camcorders as well as the 3D option on their TV lines when profit margins weren’t met. I don’t think Microsoft is really invested in VR at all and at this point is just hoping AR will make those billions for them. Facebook could drop Oculus at the next board meeting if the investors want a little higher dividend next quarter. Hopefully the Asian market will keep growth coming as they are the new economic powerhouse in the world and manufacturers of all the tech. Having to import 3D Blu-ray releases from Europe because US distributors won’t carry a niche product in our fragile economy is a great example of how corporate America will throw consumers under the bus to show a little extra profit on the quarterly spreadsheet. Hopefully we can survive as a niche market until the next commercial VR push when big corporate support fails. Hate to be a downer but I don’t think it looks good at all.
