TAIPEI (Taiwan News) — Walk into HTC’s big, boxy, monolithic office in Xindian and there are two entrances: one for the Googlers and the other for HTC’s staff.
Google invested NT$30.5 billion (US$ 1.1 billion) into HTC in 2017 as a way to effectively buy its ODM design team and access the OEM supply chain. After all, while HTC had the institutional knowledge to create great phones — in 2011 it was fighting off both Samsung and Apple in the US — its market share at the time in North America had dipped well below 1% according to StatCounter.
At the time, HTC said that the proceeds from Google would be used to invest in virtual reality (VR) which was still in its infancy.
Fast forward to today, and this is all that’s left of HTC. On paper HTC is still making phones; it announced the Desire 21 Pro 5G in January, but it no longer registers on StatCounter’s radar as the company’s share of the global smartphone market has fallen well below 0.01%.
In its place, aggressive Chinese brands like Oppo and Vivo have edged into the lower end of the market while Huawei and Xiaomi battle for the middle. Even Asus, known only as a PC manufacturer when HTC was in its prime, is experiencing extraordinary momentum with its Zenfone lineup.
What was once HTC’s mobile phone business is now the army behind Google’s Pixel. Meanwhile, the company also has its Vive team for its foray into VR.
For HTC, VR is complicated. On one hand, there are plenty of eulogies for VR — on the PC — such as developer Cix Liv who tweeted in July that “PC VR is dead,” citing depressing figures from digital gaming store Steam showing just 2% of gamers have a VR headset connected to their PC. In the thread, other developers chimed in saying it was no longer profitable to develop for PC VR given its ultra-niche status.
Instead, the developers argued, standalone and all-in-one VR was the future. There is plenty of evidence to show that it's a successful medium.
On the other hand, all the data available from market research groups like International Data Corporation shows that there’s plenty of room in the market for PC VR but just not for gaming.
"The commercial use cases for virtual reality continue to proliferate," said IDC’s Tom Mainelli, one of its research vice presidents. "As companies continue to plan for a future that encompasses a combination of both in-person and remote work, we see VR playing an increasingly important role in driving next-generation collaboration, training, and digital events."
HTC seems to have a comfortable position in this field. The Vive Pro 2 is almost universally well-reviewed with included caveats that it's intended for professionals and not gamers. HTC’s own website differentiates its line-up as being marketed as “high-end VR”, and not entry-level such as with Oculus’ Quest.
The question however remains if these two doors are enough to sustain the company. Its published monthly revenue for the year (a quirk of Taiwanese publicly listed companies) has been sporadic with gains coming in on product launches or sales and immediately falling hard after. Its quarterly reports show that the company actually makes far more money investing the surplus cash it has leftover from its glory days and the Google deal than it does making products.
These quarterly statements also show that it's becoming a disciplined company, solely focused on these two doors. Should Google’s much-anticipated Pixel 6 be a success and PC VR find its proper niche as a commercial product, then HTC will continue to survive—but not quite thrive.