The HTC Vive hasn’t been publicly available for more than a quarter, but HTC has already announced plans to spin off its virtual reality business into an independent subsidiary. The move would allow the HTC Vive to operate independently from HTC and allow it to secure financial investments from strategic partners to help grow the business and meet ambitious sales targets.
In most cases, independent subsidiaries still have obligations towards the parent company since the parent company would retain a significant ownership in the subsidiary, but it would also have the freedom to operate as it sees fit to grow the business independently of the parent company’s growth strategy. This means that the HTC Vive subsidiary would be able to develop partnerships and secure funding which would allow it to grow at a much faster rate than if it was fully incorporated within HTC.
While there is a lot of growth potential for the HTC Vive, splitting the unit off as its own subsidiary is also a strategic move by HTC to insulate its VR business from the company’s current financial meltdown. Sales of HTC’s smartphones have been on a rapid decline over the past few years and the company is quickly running out of cash. If HTC were to file for bankruptcy for any reason, the subsidiary would not be affected.
HTC has not disclosed when the changed will take place, but splitting off a business unit like this does take quite a bit of time. Do you think this is a good move by HTC?
Source: DigiTimes
I truly hope that they don’t file bankruptcy. That would be a pity. HTC does excellent smarphones, they just need to spend more money on advertising. Even Huawei is more known than HTC in Portugal at the moment.
As long as they retain ownership, it’s merely reorganization. Were they to actually spin off the entity and sell it, it would remind me of a client who sold both digital and print media, and sold the digital media business only to realize just before closing that he’d let go of the wrong asset. VR has a bigger upside than phone handsets, the latter of which are increasingly commodity items.