HTC to Focus on VR Development Instead of Hardware in Future

CEO of Taiwan-based smartphone manufacturer HTC, Yves Maitres, said ahead of the recent Tech Crunch Disrupt event that the company plans to gradually transition its innovative focus away from hardware and towards virtual reality (VR) technology.

While the company is not completely giving up on its smartphone business, it is clear that the brand has lost much of its influence in the highly competitive market. In 2011, HTC was responsible for 11% of all global smartphone sales worldwide. The brand is currently to the fringes of the market. Just this January, HTC sold a large portion of its hardware business to Google for $1.1 billion.

HTC is hoping to latch onto the trends brought about by 5G networks by committing their investments and efforts to further developing their VR segment previously pioneered by the HTC Vive VR system. 5G’s higher bandwidth capacities coupled with lower latency will augment the power of VR technology through lightning-fast streams of various VR applications.

Maitres acknowledges that the implementation of 5G networks will begin in 2020, but will probably require roughly two years to refine. Maitres believes that by 2025, 5G deployment will reach a maturity to further empower VR applications, and noted that the speed of 5G deployment is ultimately down to the individual operators.

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Earlier this year, HTC’s mobile phone products were shown to be “out of stock” on the brand’s JD.com stores, with only the HTC Vive products available for purchase. Maitres expects the company’s VR segment to outperform its mobile phone segment within five years.

According to data from the China Information and Communication Institute, the global VR industry is worth close to 100 billion yuan, and the compound annual growth rate is expected to exceed 70% from 2017-2022.

Within China, HTC faces stiff competition in the VR market from players like local telecom giant Huawei, who in September launched their new VR Glass. Meanwhile, the company can also expect more competition from foreign firms including Alphabet subsidiary Google and Japanese electronics giant Sony.

Following the release of the HTC Vive in 2015, the company has gone about creating an entire VR ecosystem comprised of the Vive X project, the VR/AR entrepreneurs, Vive Studios to produce VR content, and the Viveport to build its own VR store to attract VR developers.

VR headsets like HTC Vive accounted for over 96% of the VR product shipments in the first quarter of 2019, according to an IDC report. The top five brands were HTC, Sony, Facebook, Pico and 3Glasses, accounting for over 65% of the total market.