HTC Is Said to Explore Strategic Options

HTC, the beleaguered manufacturer that once ranked among the world’s top smartphone makers, is exploring options that could range from separating its virtual-reality business to a full sale of the company, according to Bloomberg, citing people familiar with the matter.

The Taiwanese firm is working with an adviser as it considers bringing in a strategic investor, selling or spinning off its Vive virtual reality headset business, the people said. A full sale of HTC is less likely because it isn’t an obvious fit for a single acquirer, one of the people said. No final decisions have been made and HTC may choose not to proceed with any strategic changes.

HTC’s market value has slumped about 75 percent in the past five years to $1.8 billion as its smartphone market share dipped below 2 percent. The firm has been attempting to refocus its growth prospects on the high-end VR business, with shipments of the Vive headset totaling more than 190,000 units in the first quarter, according to IDC. HTC also has a contract manufacturing deal to assemble Google’s Pixel handset.

“It’s a cutthroat Android smartphone market out there,“ Ramon Llamas, IDC’s research manager for wearables and mobile phones, said in an interview. “Apple and Samsung have made it hard for them to stay at the top of the market, and Chinese makers have made it hard for HTC to dominate the middle and low end of the market,“ Llamas said. Who might acquire HTC’s phone business is an “open question,“ Llamas said. A logical buyer might be a manufacturer in China, he said.

Vive is a “different beast“ from Facebook Inc.’s Oculus VR and Sony Interactive Entertainment LLC’s PlayStation VR, Llamas said. “I am not seeing other companies really making that play, competing in that same area,“ he said.

Founded in 1997, HTC began as a contract manufacturer. In 2002, it won a deal with Microsoft to make Windows-based phones and quickly became one of the top producers globally. It also made the first Android phone in 2008.