HTC is doubling-down on its hope that virtual reality is the future of entertainment, announcing that it has sold its Shanghai-based smartphone and tablet manufacturing facility in a deal valued at £73.4 million.
While HTC's Vive virtual reality platform has been a reasonable success for the company, its traditional smartphone and tablet business has been struggling for quite some time. In financial figures released in May 2016, HTC warned of a 64 percent drop in revenue and a £102 million quarterly loss caused by a lack of interest in its smartphone products, revenue which could not be made up by the niche sales of its high-priced Vive. That the company is looking to mainstream adoption of VR as its saviour is no secret: it has put aside $100 million for a VR accelerator programme and set up the VR Venture Capital Alliance with a claimed total of $10 billion available to startups working in the virtual reality arena.
Now, HTC is distancing itself still further from its loss-making smartphone business. The company has announced the sale of its Shanghai manufacturing plant to Xingbao Information Technology for £73.4 million. Totalling an impressive 115km² plus an additional 71m² of land, the facility had previously been used to build HTC's smartphone and tablet products. According to HTC's financial statement to investors, it expects to make a £17.24 million net profit on the deal.
HTC has not yet stated how the sale will affect its future plans in the smartphone and tablet markets, but having rid itself of in-house manufacturing it's likely the company will be considerably scaling back its efforts in the market - leaving Vive as its primary focus for the future.
While HTC's Vive virtual reality platform has been a reasonable success for the company, its traditional smartphone and tablet business has been struggling for quite some time. In financial figures released in May 2016, HTC warned of a 64 percent drop in revenue and a £102 million quarterly loss caused by a lack of interest in its smartphone products, revenue which could not be made up by the niche sales of its high-priced Vive. That the company is looking to mainstream adoption of VR as its saviour is no secret: it has put aside $100 million for a VR accelerator programme and set up the VR Venture Capital Alliance with a claimed total of $10 billion available to startups working in the virtual reality arena.
Now, HTC is distancing itself still further from its loss-making smartphone business. The company has announced the sale of its Shanghai manufacturing plant to Xingbao Information Technology for £73.4 million. Totalling an impressive 115km² plus an additional 71m² of land, the facility had previously been used to build HTC's smartphone and tablet products. According to HTC's financial statement to investors, it expects to make a £17.24 million net profit on the deal.
HTC has not yet stated how the sale will affect its future plans in the smartphone and tablet markets, but having rid itself of in-house manufacturing it's likely the company will be considerably scaling back its efforts in the market - leaving Vive as its primary focus for the future.
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