text | AI Finance Society intern Zhang Lin
editor | Lu Ming
html On the evening of July 2, Taiwanese technology company HTC announced layoffs. The layoffs involve 1,500 employees in Taoyuan, Taiwan, and are expected to be completed before September this year.After previous layoffs, as of June 2018, HTC had only about 6,450 employees worldwide. After the layoffs, HTC's global employee count will not exceed 5,000. 23% of employees will leave their jobs.
Just five years ago, the number of global employees of this mobile phone manufacturer reached 19,000.
html On July 3, HTC’s stock price was quoted at NT$52.80, down 6.71% from the previous trading day. In 2011, HTC's stock price reached a peak of NT$1,300. Seven years later, the stock price has fallen by 96%.
It started to lose weight three years ago
In the layoff statement, HTC stated that the market and production demands faced by the company show seasonal changes, so it is necessary to constantly review the human resource allocation to ensure that production capacity is consistent with market demand. . HTC believes that the layoffs are an "organizational optimization and strategic human resource allocation adjustment in the manufacturing department."
In fact, HTC has carried out several "organizational optimization" and "human resources adjustments" in the past few years.
On December 29, 2015, HTC announced that it would sell the TY5 building in Taoyuan, Taiwan, to Inventec for NT$6.06 billion (approximately NT$1.2 billion). The TY5 building is the largest in HTC's Taoyuan factory. It was built in 2011 and opened in 2013. The sale was announced just over two years before it was put into service.
In March 2017, HTC announced that it would sell its Shanghai manufacturing plant to Shanghai Xingbao Information Technology Company for 630 million yuan. The factory's production lines had been idle for more than a year before the deal was finalized. On March 20, HTC explained on its official Weibo: "HTC's production lines are now concentrated in the Taoyuan factory in Taiwan, China. This transfer of the Shanghai factory will not only concentrate production, but also improve operational efficiency."
2013, Taipei, HTC headquarters
Today, nearly 40% of the more than 4,000 employees in the Taoyuan factory will be laid off, and production will be more centralized. HTC used all the money gained from selling the
factory to invest in the VR business.
On September 21, 2017, HTC announced a deal with Google. The latter acquired the team members and assets involved in building the pixel mobile phone for US$1.1 billion, and purchased some HTC proprietary communication patent licenses.
pixel is the first step towards the integration of software and hardware for Google . This mobile phone is completely designed by Google itself, and HTC is only responsible for production and assembly. The relationship between the two is similar to Apple and Foxconn today. After the acquisition of the
pixel mobile phone team, HTC stated that it will continue to invest in its own brand mobile phone business. This acquisition is also seen as a renewal of HTC's VR business, providing it with the cash flow needed for longer-term operations and R&D investment.
Just after the transaction was completed, HTC smartphone business president Zhang Jialin announced his resignation. At the same time, HTC announced organizational adjustments to integrate the smartphone and virtual reality (VR) businesses and conduct overall management in each regional market with a single supervisor.
and Google compete VR
On June 14, 2018, the 3GPP plenary meeting (TSG#80) approved the fifth generation mobile communication technology standard (5G NR) independent networking (SA) function freeze. Based on the SA standard and the NSA (non-standalone, non-independent networking) standard released in December last year, 5G has completed the first phase of full-featured standardization work. This is good news for the VR industry. The high performance, low latency and high capacity features of
5G will better support the improvement of VR user experience. For VR users, insufficient clarity and resolution will affect the sense of immersion, which is what VR wants to bring to people.
At the same time, the screen refresh rate is insufficient, and the changes in the displayed content when turning the head cannot keep up with the speed of the head rotation, which will affect the user experience. The high bandwidth and low latency of 5G can solve this problem.
And this market that HTC bet on early has gradually shown a prosperous trend. Digi Capital predicts that the total value of the VR/AR market will be as high as US$150 billion in 2020, while Goldman Sachs’ report is more optimistic. They believe this number will exceed US$182 billion.
And HTC clearly occupies a good position in this field. In March this year, IDC released the "2017 VR Industry Annual Review Report". The report showed that among the "three major headsets", Sony PSVR ranked first in installed capacity, reaching 16% (approximately 2.096 million), HTC Vive and Google's Oculus Rift accounted for 6% (approximately 786,000).
Spain, HTC exhibited
at Mobile World Congress. For HTC, although its products have a good reputation, pricing has blocked some consumers from purchasing. On the HTC official mall, the prices of the three products Vive, Vive Focus and the relatively professional Vive Pro are 4888, 4299 (blue) and 6488 respectively.
For the VR consumer market that is still to be developed, low prices can often help companies gain a good competitive advantage. According to the IDC report, there were 13.1 million installed VR hardware devices in 2017, of which 9.3 million were Samsung Gear VR. This product has lower technological content and is more friendly in price, priced at 100 yuan.
In the first quarter of 2017, VIVE shipped approximately 190,000 units globally, accounting for 8.4% of helmet VR products. However, as Oculus cut prices, VIVE shipments dropped to 95,000 units in the second quarter, and its share dropped to 4.4%. The backside of
price competition is that VR technology currently has no indispensable usage scenarios. Most of the applications in the VR mall are also games, which makes it an expensive toy in the eyes of adults.
If HTC, which lost to Macheng in the mobile phone business, wants to make a comeback in the VR business, it still needs to maintain its leading position in hardware before 5G technology creates more application scenarios for VR. On the other hand, it depends on whether Viveport can be to HTC what the App Store was to Apple.
