bit-tech.net

HTC sells smartphone manufacturing plant, doubles-down on Vive

HTC sells smartphone manufacturing plant, doubles-down on Vive

HTC has sold its Shanghai-based manufacturing plant to Xinbao Information Technology, telegraphing its shift of focus from smartphones to the Vive VR platform.

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.

28 Comments

Discuss in the forums Reply
Pookie 20th March 2017, 11:57 Quote
business has bee struggling *been*.
suenstar 20th March 2017, 11:59 Quote
Couple typos at the start the article:

"a real valued at £73.4 million." - assuming that should be "a deal valued at £73.4 million".
"has bee struggling" - letter 'n' missing


Time for some coffee? :)
Wakka 20th March 2017, 12:04 Quote
Never figured out why HTC have struggled so much in the smartphone business - every HTC handset i've owned or used has been so far ahead of Samsung, LG and Sony in terms of build quality, and Sense was the benchmark for how to do Android properly in my eyes.

Maybe they literally put so much into that build quality they just didn't make any money on the hardware... or maybe the likes of Apple and Samsung were just too good at giving out incentives to phone carriers to push iPhones and Galaxy's...
Gareth Halfacree 20th March 2017, 12:08 Quote
Quote:
Originally Posted by Pookie
business has bee struggling *been*.
Quote:
Originally Posted by suenstar
Couple typos at the start the article:
"a real valued at £73.4 million." - assuming that should be "a deal valued at £73.4 million".
"has bee struggling" - letter 'n' missing
Time for some coffee? :)
Ta - fixed. S'not coffee I need, sadly, but painkillers; I tore the rotator cuff in my left shoulder last night and it's making typing a pain in the... Well, shoulder, I guess.
Anfield 20th March 2017, 14:10 Quote
Quote:
Originally Posted by Wakka
Never figured out why HTC have struggled so much in the smartphone business

Apple and Samsung have the high profit margin fashion brand market locked down, the low end to mid range market is an absolute cut throat business with every niche well covered and for those who want high end phones but still care about value Xiaomi, ZTE, OnePlus, LeEco, Vivo and so on offer far better value for the money than any of the traditional alternative phone brands (HTC, Sony and LG).

Sony and LG have other products to fall back on, for HTC it is tough luck, so not too surprising they are getting out while they can and gamble on the VR market.
Bindibadgi 20th March 2017, 14:34 Quote
No surprise. They're winding it down for a Vive spin-off.
Parge 20th March 2017, 14:42 Quote
Would be insane to go all in on VR in my opinion. But, I guess desperate times.....
rollo 20th March 2017, 15:28 Quote
Anfield explains it pretty well, I know this time last year Apple and Samsung had over a 100% of the profits from Smartphones due to other manufactures loosing money.

Outside of UK Wakka handset subsides are small, for example in the USA on Verizon. A IPhone 7plus 128gb edition is $121 a month with a unlimited plan.

In the uk the same phone on EE with a similar plan is £66 a month. With current exchange rates the phone is $40 a month cheaper in the UK.

We have a very unique Mobile Market. Most regions you pay up front fully or you buy the phone and plan as separate items.

HTC created very little worth buying in the last few years, they were slaughtered on most review sites. Not a big shock that they have given it up.
mi1ez 20th March 2017, 21:29 Quote
Quote:
Originally Posted by Wakka
Never figured out why HTC have struggled so much in the smartphone business - every HTC handset i've owned or used has been so far ahead of Samsung, LG and Sony in terms of build quality, and Sense was the benchmark for how to do Android properly in my eyes.

Maybe they literally put so much into that build quality they just didn't make any money on the hardware... or maybe the likes of Apple and Samsung were just too good at giving out incentives to phone carriers to push iPhones and Galaxy's...

I've only owned 1 HTC handset and it needed 2 new mainboards in 12 months. Never went back.
Vault-Tec 20th March 2017, 21:35 Quote
Quote:
Originally Posted by rollo
Anfield explains it pretty well, I know this time last year Apple and Samsung had over a 100% of the profits from Smartphones due to other manufactures loosing money.

Outside of UK Wakka handset subsides are small, for example in the USA on Verizon. A IPhone 7plus 128gb edition is $121 a month with a unlimited plan.

In the uk the same phone on EE with a similar plan is £66 a month. With current exchange rates the phone is $40 a month cheaper in the UK.

We have a very unique Mobile Market. Most regions you pay up front fully or you buy the phone and plan as separate items.

HTC created very little worth buying in the last few years, they were slaughtered on most review sites. Not a big shock that they have given it up.

That's because the UK is tiny and much cheaper to fit out with antennas etc. Cell phones (mobiles) are bloody dear out there in the U.S. You also pay for every call, no matter whether you made it or not.

Not something I miss.
RedFlames 20th March 2017, 21:45 Quote
Quote:
Originally Posted by Wakka
Never figured out why HTC have struggled so much in the smartphone business - every HTC handset i've owned or used has been so far ahead of Samsung, LG and Sony in terms of build quality, and Sense was the benchmark for how to do Android properly in my eyes.

Because their current stuff is expensive rubbish, their support is utter garbage and their attitude to updates is 'good luck with that...'.


*Glares at HTC handset on desk*
rollo 20th March 2017, 22:04 Quote
Quote:
Originally Posted by Vault-Tec
That's because the UK is tiny and much cheaper to fit out with antennas etc. Cell phones (mobiles) are bloody dear out there in the U.S. You also pay for every call, no matter whether you made it or not.

Not something I miss.

Might be doesn't change the fact that different markets do different deals. To say Samsung and Apple Pay outside of the UK is ludicrous. They both don't need to, Apple has the fashion tech and Samsung has the high end tech. Nothing else matters at this point for smartphones.

Apple and Samsung are like Intel and Nvidia dominating all players where profit is concerned.
chrisb2e9 20th March 2017, 22:08 Quote
shame, all of my phones have been HTC. And i'll admit that some of them had issues, but overall i've been happy. My HTC M8 is getting to be a few years old now. despite dropping it many times... Not sure what i'll get next.
bawjaws 20th March 2017, 22:38 Quote
Quote:
Originally Posted by Gareth Halfacree
Ta - fixed. S'not coffee I need, sadly, but painkillers; I tore the rotator cuff in my left shoulder last night and it's making typing a pain in the... Well, shoulder, I guess.

Ouch. That's a nasty injury. How you feel better soon.
Gareth Halfacree 20th March 2017, 22:58 Quote
Quote:
Originally Posted by bawjaws
Ouch. That's a nasty injury. How you feel better soon.
Ta. I was running down the stairs to catch a delivery driver and slipped. Stopped my all-too-rapid descent with my left arm, which tore the cuff. S'not a really bad tear, I don't think, but it ain't exactly comfortable.
Bindibadgi 21st March 2017, 05:45 Quote
Quote:
Originally Posted by Parge
Would be insane to go all in on VR in my opinion. But, I guess desperate times.....

The are the dominant VR force on PC with Valve's direct support vs increasingly insignificant smartphone sales that's just eating money.

Valve is working with other companies though so HTC's market advantage will evaporate before the year has ended.
mrlongbeard 21st March 2017, 08:44 Quote
Bums, I like my HTC phones, had them for my past 3 handsets all used extensively the last 1 was 3 years and the one I'm using now is just entering its 3rd year of service and still going strong.

Yes, they sit in that funny middle ground, but imho they were the best, nice design, bloody solid and just worked.
rollo 21st March 2017, 08:48 Quote
Been dominant of the current high end VR market is a strange place to be. Sales are slow if steams hardware surveys are accurate. PSVR has sold more than both PC devices combined and Samsung gear VR has sold more than all 3.

VR on pc will only take off when the device is sub £300. The current prices are too much for the current content. VR makers are in a no win situation, don't grow the market means no development means dead products. Grow the market but you may end up loosing money.

PSVR has shown a market for VR at the right price. First big manufacture to hit it on pc with correct specs will likely become the dominant player in VR. Could Apple or Samsung create something maybe but not so sure.
Wakka 21st March 2017, 09:10 Quote
Quote:
Originally Posted by rollo
VR on pc will only take off when the device is sub £300. The current prices are too much for the current content. VR makers are in a no win situation, don't grow the market means no development means dead products. Grow the market but you may end up loosing money.

This is what I've been saying all along - it's all well an good for people to say "don't knock it till you've tried it" or "proper VR is a game-changer" etc, but at the end of the day the market for people that have both a high end, VR ready PC and a disposable £700-800 for a Vive/Oculus is so small there just isn't going to be the support from AAA developers to properly develop it.

As much as people don't want it to be, it's 3D all over again. The content pool can't grow because the user base isn't there, and the user base isn't there because there isn't enough content to justify the cost of entry...
rollo 21st March 2017, 09:55 Quote
3D in cinemas works well, it never transferred well to a home environment. VR problem is more cost / content. The lack of things I wanted to try was a large part of the reason I got rid of my pre order.

£300-£400 is a buy it price, £700+ is we will think about it and probably not buy it. Does not help that to play it properly is a 1080 gpu or above.
Bindibadgi 21st March 2017, 10:47 Quote
Quote:
Originally Posted by rollo
Been dominant of the current high end VR market is a strange place to be. Sales are slow if steams hardware surveys are accurate. PSVR has sold more than both PC devices combined and Samsung gear VR has sold more than all 3.

VR on pc will only take off when the device is sub £300. The current prices are too much for the current content. VR makers are in a no win situation, don't grow the market means no development means dead products. Grow the market but you may end up loosing money.

PSVR has shown a market for VR at the right price. First big manufacture to hit it on pc with correct specs will likely become the dominant player in VR. Could Apple or Samsung create something maybe but not so sure.

12-18 months they'll hit this price. 2nd gen from HTC, Acer, ASUS, Lenovo will be in 2H of this year I imagine. Tbh I'm surprised it's taken them this long but I expect they're waiting to bring the price down before taking on HTC. At CES Acer showed a 400USD pair iirc. Watch Computex for announcements.

Apple isn't interested in VR. AR/MR, yes, but not VR. Samsung, only as a cheap by-product on mobile
jb0 21st March 2017, 11:45 Quote
Quote:
Originally Posted by Wakka
Never figured out why HTC have struggled so much in the smartphone business - every HTC handset i've owned or used has been so far ahead of Samsung, LG and Sony in terms of build quality, and Sense was the benchmark for how to do Android properly in my eyes.

Maybe they literally put so much into that build quality they just didn't make any money on the hardware... or maybe the likes of Apple and Samsung were just too good at giving out incentives to phone carriers to push iPhones and Galaxy's...

In addition to the other replies, my understanding is that they pay a significantly higher chunk of patent license fees than the other players because they don't have a big suite of patents they can slap people around with to negotiate lower fees or cross-licensing agreements. So their profit margins are already lower than an identical pocket computer from, say, Samsung. It has been an albatross on their neck for years, and there doesn't seem to be a way out except buying a company to loot their phone-related patents(which is what MS did with Nokia and Google did with Motorola).


Personally, I have had almost nothing but good luck with my HTC devices.
I say almost because one of them had a software update pushed that took battery life from a day and a half to half a day, and it was the last update they pushed before bumping that device to their no-longer-supported list.
I carried a pocket charger around for several months before I dropped it and broke the screen, because I refused to buy a new PDA over a bungled software update. (It was not a device with strong unofficial OS support, or I would've reflashed it.)
Wakka 21st March 2017, 11:47 Quote
The problem is, when the hardware becomes cheap enough for Joe Bloggs to pick one up, the hardware manufactures will run into the issue of people buying a snazzy headset and expecting it to work with their 7 year old HP/Dell/Acer computer that is in the corner of the living room... Tell Joe Bloggs he also needs to invest £600-800 worth of PC upgrades just to get the minimum from it and his enthusiasm is going to quickly fade.
hyperion 21st March 2017, 14:17 Quote
I was really keen on VR but so far most games I've seen are 10 minute novelties with terrible graphics. If the visual experience is the central selling point then I can't see it going mainstream until AAA devs start pushing the platform, no matter how good the kit becomes in the meantime.

I think cost is secondary. Enthusiasts often spend hundreds on upgrades just for a single release, or buy a console just for an exclusive. VR needs enticing AAA titles like Deus Ex, Resident Evil etc. Valve could've done a lot if they still developed games. You'd think it would be in their interest when they have their own headset out, but no.
Anfield 21st March 2017, 15:15 Quote
Quote:
Originally Posted by rollo
Could Apple or Samsung create something maybe but not so sure.

For Apple the risk is probably too high, if VR becomes normal they may well jump on the bandwagon, but I wouldn't expect it to happen in the next 2 - 3 years.

As for Samsung, the hundreds of companies they own are so diverse and so deeply embedded in the supply chain of everything else they get a cut regardless of assembling a final product of their own.
rollo 21st March 2017, 15:17 Quote
Valve would force all games to Vive only exclusives, I think both Oculus and Vive are both a problem for VR with the exclusives.

Needs 1 IP only not multiple, blueray vs HDdvd all over again, difference this time neither side has a major kick such as Sony to force a Winner.

If VR cannot get the content and price down they will struggle to be relivent come next year
hyperion 21st March 2017, 15:38 Quote
Quote:
Originally Posted by rollo
Valve would force all games to Vive only exclusives, I think both Oculus and Vive are both a problem for VR with the exclusives.

Needs 1 IP only not multiple, blueray vs HDdvd all over again, difference this time neither side has a major kick such as Sony to force a Winner.

If VR cannot get the content and price down they will struggle to be relivent come next year

Agreed on the 1 IP. A "gentleman's agreement" on cross compatibility would be a good start to help the platform develop a foothold in the market. Unless they all chuck a Zenimax and start suing each other.
SexyHyde 22nd March 2017, 02:06 Quote
Quote:
Originally Posted by Wakka
Never figured out why HTC have struggled so much in the smartphone business - every HTC handset i've owned or used has been so far ahead of Samsung, LG and Sony in terms of build quality, and Sense was the benchmark for how to do Android properly in my eyes.

I was a HTC fanboy for a long time, but they went downhill when they dropped the "quietly brilliant" slogan. They stopped listening to users, heavily copied Apple / Samsung and regularly gimped specs in certain ways without passing the cost saving on. There is way too much competition in the Mid / High spec segment for mid range specs at premium prices to work. They tried to become one of the leading players but threw away what got them to the position they were in.

They were reliant on "partners" and were way overpriced in the UK, I remember one launch event were they didn't have a UK price as they were leaving it up to their "partners" to decide what price they would be, concensus was it was about £150 more than it should have been. They also released a model where the UK model was lower spec'd than other countries yet cost the same if not slightly more. I moved to OnePlus when the One was released and while I follow HTC and hope they have a decent phone at a sensible price I can jump on, I won't hold my breath. The guys running that company, deserve everything coming to them.
Log in

You are not logged in, please login with your forum account below. If you don't already have an account please register to start contributing.



Discuss in the forums