Despite its major role in the growing VR space, HTC’s overall business continues to struggle financially, posting significant losses over the last two years. Working to turn things around with a restructuring of assets and priorities, the company is facing the sale of a smartphone factory in Shanghai. The proceeds from the $91 million sale will largely funnel toward the company’s Vive VR business, according to China Daily.

On Wednesday, HTC’s board made the decision to sell the factory to Shanghai Xingbao Information Technology as part of an effort to return the company to financial stability. According to HTC, the sale of the nearly 1.3 million square-foot factory and the land on which it’s built will not have an impact on the company’s staff or planned production capacity, reports China Daily.

While HTC’s smartphone business has seen major challenges in the last several years, VR—though still a tiny fraction of the company’s overall business—has been seen as a bright spot since its introduction in 2015. That year the company formed a wholly owned subsidiary, HTC Vive Tech Corporation, to codify and grow its virtual reality efforts which have been ramping up in 2016 following the launch of the Vive system in March.

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According to Android Authority, HTC sold another factory in 2015 for $183 million, though it continues to own and operate three key factories in Taoyuan, Taiwan. Android Authority summarizes the latest factory sale and the last few years of HTC’s financial struggles:

Established in 2009, the facility mainly produced phones for the Chinese market. At its height in 2011, it churned out two million mobile devices every month, but starting in 2013 most of its assembly lines went out of production due to decreasing demand. Rumors about a sale of the Shanghai facility first emerged in August 2015, but HTC denied it planned to offload it.

Facing dwindling sales, HTC has been cutting workforce and closing down production lines for the past five years. The company outsourced much of its production to contract manufacturers like Compal Electronics or Wingtech.

Though HTC hasn’t announced official sales figures for the Vive, the company has said that it’s selling the $800 system at profit, and recently introduced financing options in an effort to make the system more affordable.

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Ben Lang
Ben is the world's most senior professional analyst solely dedicated to the XR industry, having founded Road to VR in 2011—a year before the Oculus Kickstarter sparked a resurgence that led to the modern XR landscape. He has authored more than 3,000 articles chronicling the evolution of the XR industry over more than a decade. With that unique perspective, Ben has been consistently recognized as one of the most influential voices in XR, giving keynotes and joining panel and podcast discussions at key industry events. He is a self-described "journalist and analyst, not evangelist."
  • VR Geek

    Unless they are innovating and not just manufacturing the next mobile HMD, they are going to wash up. Too many competitors are going to enter the market and I just cannot see HTC being the go to HMD brand. They are I suspect in their VR peek now unless they have been putting some serious hardware R&D behind the scenes and have something no one else does. Think about it, once all the major brands have a mobile inside out, hand, controller, eye, body, face tracked, HMD that they got a licence to build from Google, Microsoft, Qualcomm, Intel etc., would HTC be your go to brand? Probably just as many that rush out to buy their phones today. Hate to see a brand disappear, but the writing is on the wall unless they pull a rabbit out of their a$s. I love the ViVe but will never buy HTC again as I had a truly horrible customer service experience with them that left me and, many others I discovered on Reddit, feeling just as disappointed in them. Oh and ViVe Port…How is this even a thing?

    • TDUBS

      Agreed. Once the bigger companies hop on VR its over for HTC, maybe even for Oculus too. But, at least oculus has Facebook which is a somewhat solvent company. Though, facebook could always go the way of myspace. Google on the other hand, isn’t going anywhere.

      • CURTROCK

        “Once the bigger companies hop on VR its over for HTC, maybe even for Oculus too.”

        No company that i’m aware of is investing more in VR than FB. It seems a pretty sure bet that VR is their hedge against going the way of myspace.

        • VR Geek

          I am not so sure Facebook is investing the most, as others like Apple, Google, Intel, Qualcomm and others have not really released those sorts of stats. But it is not about how much you are spending, but rather the quality of that spend and WOW is Facebook ever blowing a ton of money on stuff that is not leading the pack.

          • CURTROCK

            Well, there’s a debate to be had on that point. For today, I’ll give FB/Oculus kudos for Robo Recall, and at the very least raising the bar.

        • NooYawker

          They paid 19 billion for WhatsApp. So they spend a lot but not always wisely. Paying for exclusives doesn’t help in the long term.
          Not that I think they’ll fall when other companies get involved. I don’t think anyone can predict the market this early on.

          • Sam Illingworth

            “Paying for exclusives doesn’t help in the long term”

            Doesn’t it? I’d have thought that’s exactly where it helps – it gets people invested in your ecosystem.

          • NooYawker

            While sales aren’t released it’s generally reported that the Vive is outselling oculus. So exclusives are just keeping them in the game and there’s only two choices. These aren’t consoles, it’s pretty easy to get any oculus game to work on the vive. Gamers will always look to steam as their first choice.

          • Sam Illingworth

            Sure, but that’s the short term you’re talking about. I’m not saying it’ll work, but I think the plan behind exclusives is a long term one, they’ll be hoping the people who’ve bought Oculus now will buy Oculus in future. Someone who bought HTC now might buy Logitech or Razer or LG in the future.

          • NooYawker

            You’re missing the point, exclusives are costing FB money, money they don’t recoup in sales. It’s something they can’t keep up in the long term if they want oculus to be profitable. If they want oculus to be like WhatsApp and never be profitable and exist to provide them with user data then it makes sense.
            Bottom line is VR is for gamers, gamers gravitate towards steam. I don’t know if HTC will survive and thrive but Valve certainly will end up on top.

          • Sam Illingworth

            Money they don’t recoup in sales in the short term, you’ve no idea what’ll happen in the long term. They may be expecting to recoup it in the long term from people being invested in their system.

            Or, as you say, it may simply be a loss leader for them. You say “Bottom line VR is for gamers”, but that’s not how Facebook sees it, if it were they wouldn’t have bought Oculus. They think it’s way, way bigger than that.

          • NooYawker

            Facebook only has one thing in mind. Data mining. It’s why they paid 19 billion for WhatsApp. It’s why they bought oculus. It’s why they went with webcams as sensors. What can be better than that for Facebook.

          • CURTROCK

            Aren’t you forgetting Rift is now $300 cheaper than the equivalent VIVE? I’d imagine this will change things.

          • NooYawker

            if you want full room scale with oculus you need three sensors so it’s not $300 cheaper. But we’re talking about long term here. I’m just saying no one knows who’s coming out ahead. Just because oculus got some people to buy their hardware with paid exclusives doesn’t translate to long term success.

          • CURTROCK

            Yes, if you want a 3rd sensor, then Rift is $250 cheaper than VIVE. Also, you don’t have to get the premium VIVE headset, which would only make the VIVE $150 more than Rift. I expect HTC to begin making the premium headset standard sooner or later, and they will at some point drop their price for the VIVE as well. But for now, Rift has a price advantage, and Robo Recall is driving the hype-train.

    • VRdeluxe

      Yes they need to invest in all those things but optics should be the number 1 priority for them in the short term. Current VR is a sub standard experience, especially VR video!

    • NooYawker

      It’s all open, any company can grab the lead. They can maintain their standing if they’re they’re the one working closely with valve. As for the vive port, I uninstalled it as soon as I learned I didn’t need it. I think any company is going to have trouble running against steam vr.

  • OgreTactics

    To add to the sensical discussion below I’m glad to see, unless they’re investing in a mobile smartphone + HMD combo, and one that is capable of concurring against other brands on both products against both Apple when it’ll enter the game and Samsung who just burn their biggest competitive advantage this year and will take a huge blow in the face because of that, this doesn’t change much in Vive destiny.

    Of all the agencies I know including mine, 80% of projects are sold for GearVR/Mobile and the rest is Oculus Rift. Nobody wants to deal with an ugly, bulky, fucktons wired, unpractical light-house mounting, and unstable SteamVR platform.

    TPCast did their untethering job, rEvive did their mechanical design job, OpenVR is doing their resolution job, VRGE did their docking job, Leap is doing their hand-tracking job and some internet people are doing the wider FOV hack themselves (www.reddit.com/r/Vive/comments/4ke2p3/vive_fovclarity_mod_the_difference_is_insane_i/, http://www.reddit.com/r/Vive/comments/4f2sna/how_to_achieve_13448%C2%BA_of_fov_with_the_vive_and/ etc…) and I am only mentioning a few.

    So Vive started as the most “promising” consumer VR HMDs and ended the most unpractical one, not far from an OSVR save for the light-houses (one of which stopped working for unknown reason, then the replacement simply didn’t work because of a…misplaced light). And they’re still an underwhelmingly low number for a consumer product…

    The point is, 2017 was the year for to put a huge boost on Virtual Headset conception, which usually is a software or here a cognitive challenge given of how large it is but in VR it didn’t even remotely because of how crazy limited and far from an actual Virtual device these “consumer HMDs” are…instead they’ll somehow wait for 2018 because a particularly slow start will magically be exempt of all the economical, marketing, consumer laws of momentum interest and adoption drives and they will suddenly for mysterious reason suddenly explode on time for investors not to start asking wether their initial investment of which they expect ROIs was a good idea…That’s why I’m so pissed of by that crap Galaxy S8/GearVR thing…

    • Sponge Bob

      why just GearVR

      any mobile phone stuck inside VR is crap by definition – the only reason for its exictence is that people are used to spend 800$ in smartphones (subsidized by carriers) but are not accustomed to spending this kind of money on VR headsets – not much use so far, nono killer apps, just stupid games and “experiences”
      Wait couple years – its coming
      If Vive is dead then Oculus is dead too btw

      • OgreTactics

        Here is how I see it: VR headset are NOT computing devices. They are visual and interactional interfaces like screens, or keyboards/controllers, or mic/webcam.

        This means there is no reason why VR headset should be tethered not just by wires, but actually tethered to any proprietary platform. Imagine if when you bought a screen, or keyboard, or webcam and it didn’t work with your PC because it’s somehow not the same brand?

        When we say untethered VR, it actually means two things, wireless of-course, but also hardware agnostic: it’s only a matter of time before you can sync and beam from your VR headset to ANY PC, console, TV, laptop etc…so the mobile processing power is not relevant.

        However your smartphone contains both the high-res low-latency screen, IMU sensors, NFC(for pairing)/bluetooth(for sound/data)/wifi(for beaming/streaming), external-camera, eye-tracking etc…components which happen to be exactly what a VR headset needs or is.

        So I think the clear destiny of smartphone and VR headset, is to be tied dependently one and another, both carried as plug&play mobile devices, which does not mean you are going to use your smartphone’s CPU/GPU (though they’re becoming incredibly powerful if you look at the last Snapdragon compared to some recent basic Laptops) but be able to pair, sync and beam from any device using the same high-res, high-fov, mobile, tracking smartphone, until we simply evolve so far that they both merge into VR Glasses (obviously judging by the current rythm, not before 15 years, and only if VR picks-up this cycle).

  • Sam Illingworth

    What a shame that Samsung is leading the Android market when others make so much better phones. I hope VR does well for HTC, though I imagine it’ll be another low margin industry for the hardware manufacturers.

    • Andrew Jakobs

      ofcourse ‘others make so much better phones’ is in the eye of the beholder, a lot of people(and reviewers) think Samsung phones are great, and a lot also hate them.. (and no, I don’t own a samsung phone).

    • PrymeFactor

      If by ‘others make so much better phones’ you mean HTC, you’ve got to be joking.
      HTC’s latest 2017 flagship is already DOA…panned by reviewers.

      The S7/S7 Edge were excellent. the Note 7 was superlative…before they started exploding.