HTC says it is not spinning off its virtual reality business into a separate company.

The company has pushed out its own statement to refute earlier reports that it is launching a separate company to handle its VR initiatives.

"Recent media reports in Taiwan, such as by United Evening News, stating that Cher Wang is planning to spin off HTC's VR operations into an independent entity that will be wholly owned by Wang is incorrect," says HTC. "HTC will continue to develop our VR business to further maximize value for shareholders."

Focus Taiwan claimed that HTC Chairwoman Cher Wang was planning to set up a new company that focuses on the rising VR market.

According to the report, the chairwoman was enthusiastic in HTC's intention to spin off the VR operations of HTC into an independent firm. It is speculated that this new company is going to be owned by the Taiwan-based smartphone maker and Wang.

Discussions about this plan reportedly begun even before Peter Chou stepped down as the company's chief executive officer. Rumor had it that HTC employees were eager to jump into the VR firm. 

In an interview with The Telegraph, Wang hinted that HTC was looking at VR as a possible savior for the company.

"Yes, smartphones are important, but to create a natural extension to other connected devices like wearables and virtual reality is more important," said Wang.

In March last year, the company took the wraps off the HTC Vive at the Mobile World Congress (MWC 2015). The VR headset will be up for preorder starting Feb. 29 and will hit the market in April this year.

However, others believe that while Vive is highly touted to deliver an incredible VR experience, the VR market is still in its "infancy."

In fact, VentureBeat cites an analysis which projects that by 2020, the market will be just $2.8 billion. As a point of comparison, the smartphone market has already reached $400 billion across the globe.

"Thus, VR in and of itself is not the cure for HTC," it says.