HTC abandoned mobile phone to VR or a dangerous game of death

Recently, HTC sold mobile phone manufacturing plants and invested 630 million yuan in news in the VR field, causing widespread concern inside and outside the industry. This once-famous smart phone giant, from his previous full honors, had to sell himself and seek transformation. It was really embarrassing to be behind a crowd of domestic mobile phones. In fact, from 2015 onwards, the rumors about HTC's layoffs and sales of factories have been constant, but they did not think that it would end in this way.

For the rise and fall of HTC's mobile business, I do not want to give too much comment. Some media compiled several factors that led to HTC, which once had a market value of up to 20 million U.S. dollars and accounted for 25% of the global smartphone market share in 2011. Several reasons for this fall into the current field. It can be summed up in four points: Patent prosecution constraints, lack of The core technology, which responds to the inflexible market, has long been constrained by suppliers' operators.

These four reasons are exactly related to production, technology, market, and operations. They are the core elements of a company, but HTC has not been able to grasp the initiative at any point. The late HTC is subject to human beings everywhere. What's more regrettable is that HTC remains in the status quo for a long time. In the next five years, even if one of the problems can be solved, it will not be so soon. Fortunately, HTC is not as close as the other mobile phone manufacturers, it also has VR business, which has become HTC's life-saving straw.

HTC abandoned mobile phone attack VR risk chess, transformation or development can be put to death

From the business strategy point of view, there is nothing wrong with the practice of HTC to abandon mobile phones to VR. In the face of a fiercely changing environment and a severe challenge to competition, enterprises often have to make an overall, long-term plan to survive and develop. Even sometimes, it is not a bad idea to “abandoning the Māori car”. At least it can give priority to keeping the company’s survival and only then can it be possible to develop it again.

The primary problem HTC now faces is the survival of the company, so the first thing to consider is how to survive. However, it is unrealistic to continue to survive in this area of ​​mobile phones. It is better to invest all of the resources in the next VR industry that is about to erupt, and at least the competition has not yet entered the Red Sea. Although all major mobile phone manufacturers have also launched VR products, their main business is still mobile phones, including other companies that are doing VR. If HTC is fully committed to the VR field, if it can make Vive the industry leader in the future, there will be great opportunities for counterattacks in the future. Therefore, Wang Xuehong leads HTC to VR. It does not mean that it is necessary to stick with the psychology of gamblers to attack VR, but it is time to make a choice.

Fortunately, in the VR outbreak in the past two years, HTC has made a good reputation Vive, otherwise it will be difficult to make a transition. Because in these years, HTC did not have any advantages in the mobile phone supply chain, no patents, lack of technology and R&D, and no ability to produce parts and components. It would be quite possible to have the same technology patents as Nokia and Microsoft. Revenue is impossible, and it is not feasible to transform into a mobile phone component supplier. In other words, until the mobile phone business exited the stage of history, HTC is still just a mobile phone assembly plant, and the biggest difference between Foxconn and other OEMs is the HTC brand that it owns.

However, it is difficult to break through the short-term VR market size, and it will not usher in an industry outbreak after 2 years.

In fact, VR is not a good move, because VR is at least 3-5 years away from a mature business environment. Zuckerberg once said in an interview that the VR market is growing too slowly. To establish the ecology of the VR industry, optimistically it takes five or ten years, but it may take 15-20 years.

In the overall market scale, SuperData Research once reported that at the end of 2016, the VR market size is expected to reach US$5.1 billion, and in 2017 this figure will increase to US$8.9 billion and in 2018 it will reach US$12.3 billion. At present, this data is not much different from the actual market scale in 2016. According to this trend, the size of the VR market after two years will not exceed 20 billion U.S. dollars. Wang Xuehong said that the VR industry will erupt in two years and do not know the market size of US$20 billion. Can it bring a small upsurge to the VR industry?

On the whole, the manufacturers that are doing VR are doing layout for the future. The main characteristic of the future industry is the continuous investment in the early stage, and it can only be enjoyed in the later period. However, the performance of Vive in 2016 is not very good either. According to the report data released by SuperData in early December 2016, Google Cardboard has annual sales of approximately 84.4 million units, Samsung Gear VR approximately 2.316 million units, and Sony PSVR approximately 745,000 units. HTC Vive is about 450,000 units, Oculus Rift is about 355,000 units, and Google Daydream View is about 260,000 units. In this group of data, Vive ranks fourth in sales, and HTC is not far behind the top three businesses.

The development of VR industry is hindered by strong Vive rivals, and there are still many unknowns in the future development of HTC.

In addition to market share, for the VR industry, there are additional factors that hinder the development of the VR industry:

The first is the price. Due to the high costs of materials, processes, accessories, and technologies, together with the low volume of shipments, resulting in high costs and high prices, the speed of adoption is greatly reduced.

Second, the penetration rate is low. Price is only one aspect of the popularization rate. The lack of experience and the lack of content are also important reasons that affect the penetration rate. The main reason is that more people cannot accept VR.

Third, PC performance can not keep up. Because the performance of home PCs generally cannot meet the requirements of VR, VR devices cannot adapt these machines better and cannot be used as PC peripherals.

Fourth, content is scarce and closed at the same time. Although many businesses are making a lot of VR content, their content is not universal, and users may not be able to purchase multiple VR devices for certain content. In addition, the current number and richness of VR content still cannot support the development of the industry.

Fifth, VR devices are not comfortable enough. This is a technical issue. The lack of comfort means that the experience is poor. Most VR devices cannot solve problems such as dizziness, mainly because many technical problems are not overcome. This means that manufacturers still need to invest huge amounts of money in research and development.

These factors have led to more virtual fires in the current VR industry, so many investment agencies and the media are sing. To enter this industry, HTC still needs a lot of investment to do technological research and development, content production and more strategic layouts before it is possible to seize a larger market share. At the same time, HTC's competitors are also very strong, Samsung's technical strength is extremely strong, Google is known for its technical research and development, Sony's unique game content, Oculus behind Facebook's massive resources. If HTC wants to grab market share in this public opponent, it will certainly need some effort.

In fact, simply investing in funds and technology research and development is easier, because as long as money can solve the problem, it is not a problem. However, from the HTC mobile phone's "declination history" in these years, we can see that there are serious problems in HTC's corporate operations, or that there are certain institutional problems. If these problems cannot be solved, or continue to duplicate the operating model of HTC mobile phones, HTC Vive will also face the aforementioned problems in the future development.

A mobile phone that once occupied 25% of the global market share can finish playing within 5 years. What's more, it is a VR business with only 450,000 shipments ranked fourth. Therefore, HTC abandons mobile phone to attack VR business. , is also a very dangerous move in one step, but there are also 50% of possible deaths.

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