HTC Sells Off Its Smartphone Factory in China to Focus on VR

HTC is known for its Smartphones the One M8 for example is famous among Pakistani users.

Over the years the company’s smartphone business has suffered quite a few losses and cannot compete against the likes of Apple and Samsung directly.

A solution would be to sell its shares on the Taiwanese Stock Exchange but the share value is so low ($2.47) that it won’t help much. Plus it bears the added risk of diluting current investors, some of which have deep pockets that are holding up HTC’s stock values.

HTC’s VR Business

A ray of hope for HTC is its VR business. Even though VR headsets by Samsung and Google offer cheaper alternatives, HTC managed to sell 450,000 Vive units in 2016.

That equates to $360 million in revenue. Last year HTC reported $2.44 billion in revenue with a loss of $117 million. This was the lowest revenue ever since 2005 for HTC.

The smartphone maker is now planning to sell its phone factory in Shanghai to Xingbao Information Technology to invest in its VR business.

Factory Details

The factory which was acquired by HTC back in 2009 and covers an area of 114,000 square meters, will be sold for about $91 million. It used to be one of the main centers of production, churning out as much as 2 million phones during its heyday back in 2011. However since 2013 that number had been falling at a continuous rate.

It’s not the first factory sold by the Taiwanese-company; in late 2015 it sold one in Taiwan for $183 million. It seems likely that the production of the HTC U and HTC U Ultra smartphones will be affected.

As it stands, the virtual reality market is only just starting to warm up. Estimates say that the market could grow up to $120 billion by 2020.

Via Phone Arena

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