Well, now it's HTC's turn. Earlier this week, they cut the price on the Vive to compete with the now-much-cheaper rift, but it would seem that their VR adventure has left HTC over-extended enough that they're considering selling their Vive division, and maybe just merging entirely with another firm.
From Bloomberg:
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.
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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.HTC bet heavily on VR, partnering with VALVe to product the Vive, in part because fierce competition in a mature smartphone market was slowing profits from that division of the company. With this week's price cut, and now this news, it sure looks to me like HTC have lost that bet. VR has not become a thing, the current generation of VR technology is not finding a place in the homes of consumers, and slowing smartphone sales are just not providing enough funds to feed the bottomless black hole of VR development. VALVe might have all the money, thanks to their near-monopoly on PC game distribution, and maybe GabeN can afford to keep throwing money into a bottomless black VR hole, but a publicly-traded company like HTC eventually needs to show results; non-GAAP press releases can only do so much to disguise a reality like this:
So, with HTC now looking for buyers, the next question is obvious, and Gadfly beat me to asking it:
The question then, and now, is who would want to buy it, and for how much? A Chinese company seemed, a year ago, to be the obvious candidate. [...] A year later, the idea of a Chinese buyer seems to have cooled, though I suspect HTC's advisers still hold out hope -- if for no better reason than to ignite FOMO among any real contenders.
That brings the discussion back to Silicon Valley, where HTC Chairwoman Cher Wang spends a lot of her time. Six years after ponying up $12.5 billion to buy Motorola Mobility, it looks like Google -- its parent has since been renamed Alphabet Inc. -- could be flirting with the idea of buying the Vive business, according to Bloomberg News.
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Given HTC's current market cap of NT$57 billion ($1.9 billion), the fact that phones are still the bulk of revenue (and assets), and Vive remains an unproven business, Google shouldn't pay a dime above $1 billion. [...] Where such a sale would leave HTC, and its shareholders, is a bigger question. As it exists now, HTC can be thought of in two parts: No hope (phones) and bright future (VR).
The longer HTC's string of losses -- nine quarters and counting -- the more important it is that the VR business delivers on Wang's promise of renewed growth. I've previously argued that a merger with HMD Global Oyj, the new owner of the Nokia brand, makes sense. That probably won't happen, and it's unlikely anyone will want to buy the phone business on its own.
If HTC does sell off Vive, it loses that bright future. What remains to hope for?I'm not convinced that HTC Vive's future is all that bright, frankly, and I get the feeling that the market, generally, is catching on to that fact. Yes, Google could buy them, but Google already has their own money-losing VR division -- why would they want to enlarge that? No, my guess is that HTC will become VR's first major casualty, having bet heavily on the latest iteration of 3D TVs.