Memory of a generation! The mobile phone overlord who once punched Apple was completely cool. Is Metaverse a chance to stand up?

As a generation of youthful memories, HTC mobile phones are completely gone.

On December 13, HTC China’s official website has no mobile phones available for sale. Clicking on the smartphone link on the official website will directly jump to the US official website. Today, on HTC’s official website in mainland China, only VR products are still on sale. At the same time, HTC mobile phone flagship stores on e-commerce platforms such as Tmall and JD.com also announced the closure.

This also means that HTC mobile phones have officially withdrawn from the Chinese mainland market and will be deeply involved in the VR field in the future.

In the past few years, the domestic smartphone market has experienced ups and downs. From Apple, Samsung, to Huami OV, they have been leading the way for several years, but HTC has never seized the opportunity of dynasty to re-emerge. As the first-generation smart phone giant that has accompanied a generation of people to grow up, and competed with Apple and Samsung at its peak, it is embarrassing to retreat completely.

How did HTC smartphones go to a rout step by step? Can bet on VR take advantage of the east wind of the universe to reshape its glory? I believe many people have the same question.

The weakness of HTC’s mobile phone business is a long-standing problem, and the complete withdrawal from the Chinese mainland market this time is not without warning.

On the one hand, competition in the domestic smartphone market is fierce, leaving little market space for HTC isometric brands.

According to the latest report of the data agency Canalys, in the third quarter of this year, vivo, OPPO, Honor, Xiaomi and Apple were the top five smartphone brands in mainland China in terms of market share, with a combined market share of more than 87%. The remaining market share of less than 13% is shared by all other mobile phone brands. It is not difficult to imagine how small the cake each manufacturer can get.

Observing the market data of the past two years, the Value Research found that the head effect of the domestic smartphone market is becoming more and more obvious. The shipment volume and market share of the top five brands have further increased, which has severely suppressed the living space of other waist brands. .

The same data from Canalys shows that in the third quarter of this year, shipments of smartphone brands other than the top five brands fell by 60% year-on-year, from 26.9 million units in the same period last year to 10.7 million units this year, and the market share also increased from 34. % Fell to less than 15%.

In this situation, it is inevitable to be a little sad for the glorious HTC.

According to media statistics, during the most glorious period of 2008-2012, HTC released a total of more than 50 smartphones. Explosive models such as HTC G7 have achieved sales exceeding 10 million in 4 months. At that time, HTC was infinite: its market value surpassed Nokia in one fell swoop and became the “second master” of smartphones second only to Apple, with a global market share of over 13%.

But after Apple’s series of patent lawsuits against HTC, the latter was greatly injured and depressed. First, the sales volume of HTC ONE X Waterloo, which was highly expected, then withdrew from the South Korean and South American markets, and its market share has shrunk significantly.

In fact, before this official exit, HTC’s mobile phone business layout in the Chinese mainland market has been shrinking. In 2019, it also closed the official flagship stores of JD.com and Tmall. Now that the market concentration has further increased, it is not surprising that HTC phones that have lost growth opportunities have completely retreated.

On the other hand, since selling its mobile phone business to Google, HTC has shifted its development focus to VR smart hardware devices, and has no extra thoughts and capabilities to engage in the mobile phone business.

As we all know, HTC’s mobile phone business was packaged and sold to technology giant Google in 2017 for $1.1 billion. However, the latter obviously did not pay too much attention to the mobile phone business sector.

When the transaction was completed in early 2018, most industry insiders bluntly said: Google only wants the HTC shell, and then touted the “pro son” Pixel series on the top.

But the development of things may be worse than imagined. Zhang Jialin, president of HTC’s smartphone business, announced his resignation after the completion of the transaction. HTC’s more than 4,000 smartphone R&D engineers have been merged into the Google Pixel business unit, but they have not developed enough amazing new products. All signs indicate that the merger of the two teams is not smooth. The acquisition did not bring about the expected win-win effect.

Google’s third-quarter financial report shows that advertising and cloud services are still its most important sources of revenue. The former’s single-quarter revenue increased by 43% to 53.13 billion U.S. dollars, accounting for more than 80% of revenue. The above-mentioned various evidences show that the status of the mobile phone business in Google’s aircraft carrier is rather humble.

In fact, in the view of the Value Institute, Google, which owns the gold mine of Android, has always been microseconds towards making mobile phones in person.

In 2012, Google finally passed the European Union’s antitrust investigation and acquired the mobile phone giant Motorola. The acquisition price was as high as $12.5 billion, which was much more sensational than the subsequent acquisition of HTC’s mobile phone business. But only two years later, Motorola was “sold” to Lenovo by Google for $2.9 billion.

In the past two years, what has Google done to Motorola? The answer is very simple, just one word—demolition.

The first is to cash out 2.4 billion U.S. dollars through the divestiture and sale of the set-top box business, and then merge Motorola’s original 3 billion U.S. dollars in cash and 1 billion U.S. dollars in tax relief into its financial statements. Finally, more than 15,000 original Motorola’s Technical patents “hold for your own use.”

After all this tinkering, Google can be said to have drained the essence of Motorola before leaving the remaining empty shell to Lenovo, which is receiving the plate. As for the mobile phone business purchased from HTC, although Google is not as decisive as it did with Motorola, it can’t say that it pays much attention to it.

Turning your eyes back to HTC, the mobile phone is a pity that is tasteless and discarded, and its status is even more embarrassing.

Although after packaging and selling its mobile phone business to Google, HTC still retains its own mobile phone brand and part of the team, and continues to develop new products, but most of the thunder and rain drops. And as early as 2016, HTC Chairman Wang Xuehong stated that the VR business is becoming the core of HTC—whether it is the US$1.1 billion in funds from the previous sale of the mobile phone business to Google or the proceeds from the earlier sale of the Shanghai factory. Put all into the VR business.

Since smart phones are at the end of the battle, it is reasonable for HTC to change its way of life. It’s just that, can the heavily-invested VR business really give HTC a better future?

Unfortunately, at least not yet.

Objectively speaking, the VR market has certain potential, but the opportunity for a major explosion has not yet been seen.

According to the latest report released by the research organization Omdia, the global VR C-end market is expected to reach 16 billion U.S. dollars in 2026. VR headset shipments in 2021 are expected to be 12.5 million units, and VR content expenditures are estimated to be 2 billion U.S. dollars.

Compared with a few years ago, the progress of the VR industry is still very obvious, regardless of the market size, the number of devices per capita, and the number of active VR headset users. Especially the number of active users of the headset, Omdia expects to reach 70 million by 2026-this number will exceed the number of active users of the Xbox game console during the same period, reflecting the changes in user preferences.

However, on closer inspection, the growth rate of the VR market is not as optimistic as expected, and HTC’s VR business has not been smooth.

First of all, according to data from the Steam platform, as of May this year, the proportion of active users of VR headsets was only 2.31%, a month-on-month increase of 0.09%, and the growth rate was very slow.

The Value Research Institute believes that at least a few problems need to be solved for the VR industry to fully commercialize and accelerate its penetration into the C-end.

First, improve convenience and increase computing power. In recent years, the emergence of VR all-in-ones has solved the limitation that most VR devices must be connected to PCs, mobile phones or game consoles, and their use scenarios are relatively single. This is an important future for the VR industry. Development direction; the second is to enhance the sense of experience, and achieve the effect of 4K screen in refresh rate and resolution; third, and the most important point-to improve cost performance.

Meta’s Oculus took the lead in taking advantage of its cost-effectiveness, reducing the price of its VR all-in-one machine to around US$300, successfully grabbing a large share of the C-end market.

At present, the HTC Vive Pro headset is priced at around 8,000 yuan, the high-end Focus 3 VR all-in-one is priced at nearly 10,000 yuan, and the price of the VIVE PRO 2 professional version has reached more than 12,000 yuan, which has no price advantage compared with the Oculus Quest series. At all.

Secondly, with the entry of giants such as Meta, competition in the VR market has gradually intensified, and HTC’s early accumulated share advantage is losing.

Statistics from foreign media show that Oculus has a market share of more than 50% of the VR hardware equipment market, and it is still showing a rapid upward trend. With the rapid rise of Oculus, the market shares of HTC, PICO, DPVR and even Sony have all been eroded to varying degrees.

Data from the Steam platform also shows that as of May this year, the top three active VR devices were Oculus Quest 2, Oculus Rift S and Valve Index HMD, and this ranking has not changed for 4 consecutive months. The fastest growing is Oculus Quest 2, with a year-on-year increase of 1.55%, which is the only model with an increase of more than 1%.

In contrast, HTC’s market share has fallen from its peak of nearly 30% in June 2020, and it is now about to be caught up by Valve, which ranks behind it.

Under the combined effect of various unfavorable factors, the Value Institute had to remind everyone to pay attention to an embarrassing fact-after a series of operations such as splitting the mobile phone business and fully developing the VR business, HTC has not changed its destiny of losses for years.

Data shows that HTC’s total revenue in the third quarter of this year was NT$1.34 billion, net profit attributable to the parent was NT$770 million, net loss NT$880 million, and operating profit margin as low as -65.8%. In the first two quarters of this year, HTC also recorded a net loss of NT$1.28 billion and NT$1.05 billion, while revenue during the same period was NT$1.18 billion and NT$1.35 billion. According to this development trend, there is little suspense in performance decline for the 10th consecutive year.

You must know that this year HTC has made great efforts in VR product development iterations and external marketing: the first quarter of the launch of the new generation of Vive mobile locator and Vive expression detection kit, the second quarter of the release of two new VR products and VR commercial solutions , The flagship PC VR device HTC Vive Pro 2 and Styly VR creation platform were launched in the third quarter… But this effect is obviously not satisfactory.

However, after entering 2021, HTC seems to see a new dawn-the rise of the meta-universe concept. For HTC, which has been betting on VR for many years, it is like a shot and a life-saving medicine.

It is said that Metaverse is the hottest outlet at the moment, and VR happens to be the industry that is most closely related to the concept of Metaverse. Can HTC, which has been cultivated for many years, have a “top slurping soup”?

Can Metaverse save HTC?

Since the meta-universe concept detonated the world in 2021, HTC has carried out a large number of layouts around the two tracks of VR and meta-universe.

For example, Beatday, a virtual concert platform launched this year, has attracted a lot of attention.

HTC is not the first and not the only one to cut into the meta universe market with virtual/online performances. In June of this year, the Sims held a 9-day virtual music festival; in July, Splendor XR also invited users to participate in the online music festival through online MR activities, and achieved good results.

In September, Beatday was launched on PC and mobile one after another, and the relevant person in charge of HTC said that the full version of VR will be explored in the future.

When HTC Vive Originals was launched, Siming Liu confidently stated that offline concerts have been postponed or cancelled on a large scale due to the epidemic. Holographic concerts based on virtual reality and AI technology in cash will become a kind of The new online performance method may even change the entire online performance market.

At present, HTC is very optimistic about the commercial prospects of Beatday. The price of a single show may be set at 60-130 yuan. The main sources of costs are customized avatars and concert tickets. After its own VR equipment and technology are fully integrated into the Beatday platform, it is expected that a high-end version of the package will be launched.

HTC’s pricing is not exaggerated. In March of this year, iQiyi’s online concert for the talented girl group THE9, the highest ticket price reached 399 yuan; last August, the top national TFBOYS online concert, the highest ticket price was as high as 860 yuan. It is almost the same as an offline concert.

But it has to be said that the above successful cases can prove that in 2021, when the concept of the meta universe is flying all over the sky, HTC has chosen a fairly reliable landing scene.

On the one hand, because the epidemic will continue for a long time, offline performances are faced with problems such as high risks and declining input-output ratios. Online concerts have indeed won the favor of many performance companies and consumers.

Since 2020, the number of online concert users has soared. As the main consumer post-00 users online music performance users TGI reached 109.7, and market demand is still rising, the growth curve is expected to further steepen.

On the other hand, because online performances can save a lot of manpower and time costs, are reproducible and easier to process management, the gross profit rate will also be higher than offline performances.

Take the aforementioned iQiyi THE9 online concert as an example. From the very beginning, the concert used slogans such as immersive virtual concerts, XR live broadcast, advanced LED realistic virtual production technology, and a large number of high-tech technology applications, which attracted everyone’s attention and seemed to burn money. But for the return on investment of such online virtual concerts, iQiyi executives appear confident.

Chief producer Yang Haitao said in an interview with “The Paper” that although the initial technical investment of virtual online concerts is not low, the victory lies in the continuity and reproducibility of the technology, and the subsequent marginal cost will gradually decrease. Come down.

For HTC, which is already doing AR business, if the Vive series of products can be combined with the Beatday platform, it will not only increase the price of tickets, but also play a complementary role in technology, which is believed to be its key development direction in the future.

Of course, HTC is definitely not the only one who fancy this piece of steamed bun. In addition to the aforementioned iQiyi, giants such as Huawei and Tencent have also entered the game:

In April of this year, Huawei and pianist Lang Lang jointly launched VR music works that use 3D vision, shooting technology and subjective perspective to enhance the sense of immersion;

Not to mention Tencent, which already has a deep accumulation in the music field. Through the QQ music platform, Tencent has successively held online concerts for Rainie Yang, Rene Liu, and Mayday, etc., and it has been improving its technology by integrating XR and other technological enhancements. Immersion

Even Roblox, known as the “first stock of the meta universe,” is actively trying to step out of the game circle and explore the possibility of online live performances and large-scale community events through the interconnection of PCs, mobile phones, Xbox and other devices.

Fortunately, HTC did not put all the eggs in one basket. In addition to launching Beatday to target the virtual concert track, it is also experimenting in other areas.

In October, foreign media reported that HTC plans to develop VR social networking and intends to build a new meta-universe social platform Viveport Verse in addition to the original Vive Sync, which will be benchmarked against Meta’s Horizon Worlds in the future. Although there is still very little information about this new project, at least, because of the explosion of the meta universe, HTC vaguely sees the hope of a comeback.

Write at the end

At the Salon “Opportunities and Challenges of the Ultimate Form of Meta Universe Internet” held by NetEase in September, Wang Congqing, President of HTC China, once said that Ultimate Meta Universe is “a perfect world”:

In 2021, Metaverse is undoubtedly the hottest commercial track, and there are countless players who want to squeeze into this fast train, including HTC. For this down-and-out former smartphone hegemon, Meta Universe and the VR industry behind it are also the “perfect world” where they pin their hopes for the future.

Whether Metaverse can save HTC is still unknown, but what is certain is that the modern business world is full of various unknowns and possibilities. For HTC’s tomorrow, we can also wait and see.

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