HTC to spin off the Vive into an independent subsidiary
During HTC’s company shareholder meeting, HTC president for global sales announced that the company will spin off the HTC Vive into its own independent subsidiary in an effort to be more competitive and secure investments with strategic partnerships. As with all subsidiaries, HTC is expected to maintain significant control of the Vive VR business, but HTC has no disclosed what percentage of the subsidiary would be up for grabs for those interested in investing in the business.
Cher Wang, CEO of HTC, also stated that HTC is confident that the HTC Vive VR business will not have any difficulties generating profits due to the projected high demand for VR content and hardware in education, shopping, healthcare and entertainment over the next decade.
Allowing the HTC Vive to stand on its own shows that HTC has a lot of confidence in the business unit. However, the move appears to be financially motivated more than anything else. Due to declining sales of HTC smartphones over the past few years, HTC has drained much of its cash reserves and simply doesn’t have enough cash on hand to invest heavily enough into the HTC Vive as it should. The move also protects the HTC Vive business from any financial woes that the parent company may ensure if its smartphone business does not recuperate. The questions is: how much control is HTC willing to relinquish in order to turn the Vive into the cash cow that analysts are projecting that it could be?