HTC sells factory to fund its VR operations

HTC sells factory to fund its VR operations
The HTC Vive VR headset got off to a good start for the company when 140,000 units sold in the first seven months ended last November. Each unit retails for close to $800. For all of 2016, it is estimated that 450,000 Vive units were sold, bringing in $360 million in gross revenue. While handsets still bring in the majority of HTC's cash,  last year CEO and co-founder Cher Wang said that VR is more important to HTC than its lumbering smartphone business

Even though the HTC 10 was well received, it did not sell all that well. And as gorgeous as the HTC U Ultra looks, the company simply faces too much competition when it comes to smartphones. So what do you do if you're HTC, and the device you are known for is selling like coldcakes (in other words, you're struggling) and you need to raise funds to continue expanding your promising new division. HTC could sell more shares on the Taiwan Stock Exchange. However, the stock remains near historical lows, trading at the equivalent of $2.47 a share. Selling additional shares at that price will dilute current investors, angering many of the deep pocketed funds that are holding up the price of the stock. So that is out. And selling bonds with the company in its currentl precarious position would mean paying exorbitant interest rates.

So HTC decided to raise $91 million that it could use toward its VR operations by selling a 114,000-square-meter factory in Shanghai. The plant sits on 28 acres of land. The company making the purchase is Xingbao. While the money will help, keep in mind that thanks to its beleaguered smartphone business, HTC reported an operating loss of $117 million last quarter. For all of 2016, the company had revenue equivalent to $2.44 billion. That was the lowest top-line number reported by HTC since 2005.

The transaction announced today includes some additional land along with the factory. HTC issued a release in which it said that the deal will "fulfill the company’s operational adjustment needs and assets activation." HTC confirmed that the money raised from selling the plant will be used for its "expanding VR business."

source: HTC, FocusTaiwan via AndroidAuthority

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17 Comments

1. clevelandiskindacool

Posts: 37; Member since: Jul 03, 2012

Sell the kids to save the house! HTC didn't have enough manufacturing power to keep Pixel in stock. Xiaomi for Pixel 2

2. flavius22

Posts: 218; Member since: Aug 23, 2015

"Nobody makes money with android"

3. nokia12

Posts: 610; Member since: Nov 19, 2013

They are better off following Sony's business model .. scaling down operations in low -mid end and focusing on high end , Less sales but still making some profit

4. haikallp

Posts: 319; Member since: Feb 10, 2012

Sony isn't making any profit from its mobile division.

7. combatmedic870

Posts: 984; Member since: Sep 02, 2015

They actually are... One of the few.

12. iushnt

Posts: 3085; Member since: Feb 06, 2013

Nope.

10. sgodsell

Posts: 7164; Member since: Mar 16, 2013

PhoneArena needs to report things correctly. HTC is investing into more VR that is standalone VR, and not the current Vive. That is why even Facebook is doubling down on standalone VR as well, like their partnership with Samsung and the Gear VR. Desktop VR with cameras spread around a room is only going to be a niche, and sales have proven that. Mobile VR is what everyone wants. Look at Intel and Qualcomm are both releasing VR development headsets with cameras on the front of their headsets. Basically these up and coming mobile VR headsets can do object and hand recognition. So no cables or wires to trip over or worry about, and not being locked to a specific location or room.

14. joey_sfb

Posts: 6794; Member since: Mar 29, 2012

"Everyone makes money with android"

11. iushnt

Posts: 3085; Member since: Feb 06, 2013

I make money with android. Now a days, I am earning through rooting and installing custom roms. :) However, this is just my side income.

17. sgodsell

Posts: 7164; Member since: Mar 16, 2013

Please explain to everyone here how money was made with 1.5 billion smartphones that were sold last year (2016). Apple sold 215 million smartphones last year, and the rest is Android. So if basically if nobody is making money from Android, then why is it still selling? Not just selling, but it is the dominate force behind smartphones. Even Apple is following in Androids footsteps.

5. trojan_horse

Posts: 5868; Member since: May 06, 2016

Not sure what the HTC Vive hype is about, but it indeed seems good. Not yet sure if to get one or not, as my Gear VR is enough for me at the moment.

6. remixfa

Posts: 14605; Member since: Dec 19, 2008

They need to stop pricing like they are still "the premium android manufacturer" like they were 5 or so years go. Samsung took the crown and isnt giving it back. They are mid to mid upper tier and will be for the forseeable future. And that's fine. But realize that and cater to that audience instead of continually trying to cater to the cutting edge with non cutting edge hardware and designs. Lots of other manufacturers are finding success by NOT directly competing with the high end samsung lines. They dont own the market. Give me my Nokia wish list and we'll talk. Vanilla or near vanilla android that still gets super fast updates. a fat battery, small bezels (they dont have to be super fancy like the S8), and a fantastic camera. Really. That's it. They arent getting any of that right anymore. So it's their fault they are dying. But let's hurry up with making the Vibe more price friendly (Which will happen in time). I may end up getting one in the not too far off future.

8. Quicksword_Phantom

Posts: 180; Member since: Jun 15, 2015

Yet they release s**t like U ultra which is a ripoff of LG's V series. Wtf. RIP HTC.

9. arming

Posts: 65; Member since: Jul 23, 2016

htc need to wakeup from their premium pricing dream . i hope they could price vive cheaper soon before competitor weight in . at 800$ price tag with 450k unit sold ,there will be more rival soon beside oculus .

15. remixfa

Posts: 14605; Member since: Dec 19, 2008

the occulus just got a $200 price cut and that includes the controllers now.

18. sgodsell

Posts: 7164; Member since: Mar 16, 2013

It doesn't matter what price cuts Oculus Rift drops too. It will always be a niche. The same goes for the HTC Vive. That is why Facebook is doubling down on standalone VR like the Gear VR (Oculus). Even HTC is investing more in standalone VR headsets. Because that is the future of VR. Most smartphones already have everything for VR. It just depends on how good of an experience you are looking for. For instance Daydream VR is the first commercial mobile VR platform to offer some degree of spacial awareness to it's platform. Just recently Samsung introduced a 9-axis controller similar to Google's Daydream controller. In the fall both Intel and Qualcomm will be releasing standalone VR headsets with hand and object recognition on their VR headsets. So the advantages of the rift and Vive are diminishing. Mobile VR/AR/MR is where it's at.

16. rajkatiyar07

Posts: 28; Member since: Jun 11, 2014

And i whisper Stay strong HTC !

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