HTC confirmed it had set up a business called HTC Vive Tech, to “prepare for future technology development”, amid reports of weak demand for its HTC 10 smartphone in China.
The company noted that the creation of the new unit “does not affect HTC’s daily operation”.
There is some question as to whether the new business will exclusively focus on virtual reality, although by sharing its name with HTC’s VR products, it is not surprising that this is the conclusion widely being drawn.
And this is not the first time HTC has been linked with a spin-out of the unit, although previously it denied such a move, arguing that it will “continue to develop [its] VR business to further maximise value for its shareholders”.
Unsurprisingly, the news was not welcomed by investors, concerned that a future growth driver is being split from the company’s core – and ailing – smartphone unit. With little evidence that a turnaround is in store for the core business, it was opportunities in new and adjacent markets that had provided the potential upside for HTC.
There is no doubt that the company sees a significant opportunity in VR, following strong early sales for its Vive headset. It has set up a $100 million fund to support ecosystem growth.
According to Focus Taiwan, HTC has seen a particular lack of interest in its latest flagship, HTC 10, in China, with around 250 pre-orders in 11 days through online retailers Tmall and Jingdong Mall.
It was suggested that this is because the device has a lower spec in the Chinese market than overseas, in order to bring it to market at a lower price point. This unit is called HTC 10 Lifestyle, and features a lower-spec Qualcomm chip, reduced RAM, and lower-tier LTE support.