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VR Is Not Going To Save HTC

HTC's financial results for the fourth quarter of 2016 look as bad as they can be for the one time darling of the smartphone world. Revenue was down 13% year on year, whilst drastic cost-cutting (wiping 34% off the cost of doing business) helped to ease losses slightly.

Nevertheless, looking at 2016 as a whole the company managed to run a near half billion dollar deficit.

To add to the company's woes it failed to make more sales in the Q4 holiday season than it did in the traditionally quiet Q3 quarter. In itself a large red flag.

It would be interesting to speculate how these numbers would look without the contract to manufacture Google's Pixel. And with VR in questionable space, having already lost its place as the next big thing to AR, it seems unlikely that the Vive is going to be the big hit that helps turn the business around.

It really does seem as if HTC is in a battle to avoid drowning and it's on its way down for the third time. It doesn't have a product based lifeline waiting in the wings either.

If the company is to survive it's likely to be by embracing the contract manufacturing roots that drove its earlier successes. Of course in the intervening years that market has become even more cut throat and competitive than the Android one.

It's a tricky path the company has to negotiate now and it's hard to see a road that leads HTC anywhere but the precipice.


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