HTC bets bigger on VR
Industry analysts caution that survival requires paying to play
At the 2018 World Conference on VR Industry, the spatial VR experience of the historic Chinese painting Along the River During the Qingming Festival was showcased to visitors. The famous 2D flat scroll painting was turned into a fully interactive urban environment, where users can appreciate what it’s like to live hundreds of years ago.
This is just one of the many scenarios VR could bring to the public.
The conference, jointly sponsored by China’s Ministry of Industry and Information Technology and the provincial government of Jiangxi Province, was held from Friday to Monday in Nanchang, East China’s Jiangxi Province. More than 2,000 domestic and foreign experts, scholars and entrepreneurs in the field were invited to the conference which focuses on cutting edge VR technologies.
HTC, the Taiwan-based phone maker, is among those companies who are eyeing on the industry’s prospects. The company is betting bigger on VR since it launched its first VR device Vive in 2016.
During the conference, Alvin Wang Graylin, president of HTC’s China unit, announced the launch of its new VR Vive – Vive 6DoF (6 degrees of freedom) Developer Kit for the Vive Wave Ecosystem.
Wang also announced the soft opening of the world’s first HTC Vive Flagship Store at the WCVRI, which is located in Shenzhen, South China’s Guangdong Province, where consumers can have a VR arcade experience.
“Entering the VR market in 2016, HTC has now grown into a major player in the field, and it’s Vive products are quite competitive on a global scale, especially on the commercial
side,” James Lu, a Shanghai-based industry analyst told the Global Times on Sunday.
In 2017, International Data Corp (IDC) ranked HTC as one of the top VR vendors along with Samsung, Facebook and Google in terms of worldwide shipments.
However, on the consumers’ side, it might lag behind, Lu said.
It’s the US competitor Oculus, invested by tech giant Facebook, that has also announced its new VR headset in September, the Oculus Quest – a standalone virtual reality headset, of which Facebook CEO Mark Zuckerberg described as “the foundation of a new generation of VR.”
Promising prospects
Experts and industry players at the conference expressed their optimism toward the new technology, stressing that VR will change every way in which people live, work and study in the future.
Hugo Swart, senior director of product management of Qualcomm Technologies Inc, said that with the development of the technology, it’s possible that all mobiles would be substituted with a pair of VR glasses that combine VR, augmented reality (AR) and communication functions.
According to a report IDC released in June, it forecasts the overall AR and VR headset market to grow to 8.9 million units in 2018, up 6 percent from the previous year. That growth will continue in the following years, reaching 65.9 million units by 2022.
“Currently, almost 95 percent of the world’s VR equipment is produced in China,” Wang said, noting that China will lead the VR development.
According to a report from iResearch, China is expected to become the largest VR market in the world by 2021, and the industry scale would reach 79.02 billion yuan ($11.4 billion).
Meanwhile, local Chinese governments have been ramping up efforts to boost VR development by issuing preferential policies to attract tech companies and build a VR ecosystem.
For example, Jiangxi Province launched a VR industrial base in 2016.
Wang told reporters on the sidelines of the conference that HTC has been working closely with Jiangxi, but did not disclose any more details of their cooperation.
On Saturday, the US tech company Microsoft signed a memorandum of understanding (MoU) to locate its first VR incubator in the province.
“With the commercialization of 5G, which is significant for VR on the mobile side, and the Chinese government’s growing emphasis in the tech industry, HTC enjoys an advantage in VR development compared with its US competitors such as Facebook,” Zhang Zhilan, CEO of Hong Kongbased Hailancheng Technologies, told the Global Times on Sunday.
Sluggish sales
Despite the industry’s promising future, Lu cautioned that investment in VR could not get HTC out of the financial dilemma it faces now.
“HTC needs to consider whether VR could help it make profits, while now it appears it can’t, at least at the moment when the technology is not
mature enough,” Lu said.
Amid the waning sales of its smartphone business, HTC announced in February that it would merge its VR and smartphone divisions after moving half of its smartphone R&D team to Google in January, which industry analysts said might be a chance to see a rebound in its sales performance.
But the move did not drag the company out of a series of financial losses that started around four years ago.
According to the company’s financial report, from January to June this year, its revenue continued a big drop – down 49.3 percent from the same period in 2017, to $15.6 billion. In June, the company saw a one-month revenue drop of 67.6 percent year-onyear.
“The whole VR industry is having difficulties in making profits currently,” Lu Liquan, co-founder of the Shenzhen-based VR start-up company ConfigReality, told the Global Times on the sidelines of the conference on Saturday.
“If you want to produce good contents to attract consumers, you have to pay a high cost, but buyers, especially daily consumers, would not be willing to pay such a high price. Thus, industry players are the ones who are paying for the losses,” Liu noted.
The technology currently seems more like a cash-burning game, and it is unlikely to make big profits in the short run, Liu noted. When asked about HTC’s dissatisfying financial reports, Raymond Pao, general manager of North Asia for HTC, told reporters on the sidelines of the conference that HTC is committed to the long-term development in the industry, and has prepared enough “bullets” for its layout.
“Since we are still laughing, we are doing fine by far,”
Pao said, but declined to release information on the sales number.
Over the past years, more tech companies have been expanding their virtual reality (VR) layout eyeing on the sector’s promising prospect. Experts and industry players expressed optimism toward the new technology at an industry conference over the weekend, saying that VR will bring many changes to people’s lives in the future. A report said that China is expected to become the largest VR market in the world by 2021, with industry scale worth of about $11.4 billion.