HTC, the smartphone manufacturer that struck gold with the Vive headset, is reportedly thinking about selling or spinning off its virtual reality business.
Reports on a possible Vive spinoff by HTC surfaced over a year ago. The current struggles that the company is facing, however, have revived the possibility of making such a move.
HTC May Spin Off Or Sell Vive Business
According to an exclusive Bloomberg report, HTC is thinking about either spinning off its Vive virtual reality division or selling it to another company, said sources familiar with the matter.
HTC, once among the top smartphone manufacturers in the world, has tapped an adviser as it considers whether to spin off or sell its Vive business. One of the companies that HTC has spoken to about offloading its Vive division is Alphabet's Google, according to one of the sources.
There is also the possibility that HTC will instead look to add a strategic investor to boost its standing, or on the other end of the extremes, to sell the entire company. The latter outcome is less likely though, due to its wide range of businesses that expand beyond smartphones and virtual reality. It would be difficult to find a company that would acquire all of HTC's divisions in one full swoop.
There are no final decisions yet on which direction HTC will take, or even if it will choose to move forward with any changes.
The Struggles Of HTC
The HTC Vive has been a massive success, and it is difficult to see how the company can find itself struggling even after the virtual reality headset's performance. The virtual reality headset sold more than 190,000 units in the first quarter, with plans to release a standalone Vive in China, but the division has been the lone bright spot for the company.
The company's core business as a smartphone maker has languished amid the cutthroat competition in the industry, with HTC stock down by 75 percent over the past five years and down 95 percent from its peak in April 2011. HTC smartphone sales have slowed down significantly in the two major markets of the United States and China, with market share currently just below 2 percent.
HTC, if it proceeds with selling its Vive business, will receive a sizable infusion of cash to its coffers. The long- term benefits of selling or spinning off the only division that has been performing well for the company, however, remain unclear.