Report: HTC to spin-off Vive VR in to independent company [Update: HTC says No]

Update: HTC has sent a note to investors refuting rumors that it will spin-off the Vive to a separate company owned wholly by Cher Wang.

“Recent media reports in Taiwan, such as by United Evening News, stating that Cher Wang is planning to spin off HTC’s VR operations into an independent entity that will be wholly owned by Wang is incorrect.
HTC will continue to develop our VR business to further maximize
value for shareholders.”

A report from Focus Taiwan this morning claims that HTC is seriously considering, even planning, to spin-off its virtual reality efforts in to a separate independent company. If HTC goes ahead with the plans, it could mean we’ll eventually start seeing headsets like the Vive launch without HTC’s branding on them…

Having initially shown off the Vive VR headset at MWC last year in Barcelona, HTC has taken its time to develop and improve the VR kit so that it’s ready for consumers. It’s expected that we’ll finally see it hit the market with a slightly different design towards the end of February, when pre-orders are due to go live for the futuristic headset.

There are several reasons why HTC could be planning to spin off the product in to its own company. The most obvious reason is to remove the promising gadget from its ties to the smartphone industry. With HTC struggling to compete in the current Android smartphone market, and losing market share and money, the VR efforts would be less at risk of collapsing if split away from the smartphones. The last thing the company wants is to have a great VR product which people love and purchase, and then have to shutter its production because HTC-branded smartphones aren’t selling well.

Although the new VR company would still be wholly owned by HTC, making it independent would mean it having its own separate revenue stream, leaving it unaffected by any success or failure of the parent company’s smartphones.

Another reason to consider is that HTC has an opportunity to create a strong individual brand. While tech enthusiasts have been aware of VR for a couple of years now, the average consumer is yet to see any kind of mass market product on store shelves. With the VR industry being in its infancy, with Vive’s technology and potential, it could turn out to be a real market leader.

What’s more, with a separate, dedicated VR company, HTC could double down on its efforts and have people solely focussed on developing awesome virtual reality products. The renewed focus could instill confidence in its employees, and stop them from leaving for competitor companies.

We don’t have a price yet for the upcoming Vive headset, but we are expecting pre-orders to go live on February 29. Getting the pricing right will be essential to the Vive’s success though. With the Oculus having raised eyebrows at $599, the HTC Vive’s rumored $1,500 price tag will seemingly be far too high, even if it is massively ahead of the curve.