The mobile phone market is saturated and needs to be transformed. HTC wants to make a comeback with VR?

On April 26, the virtual reality device HTC VIVE was officially pre-sold in China, priced at 6,888 yuan. Sales went on at 2 p.m. that day, and by the evening, they were sold out on both JD.com and Tmall.

At the same time as the pre-sale, HTC Chairman and CEO Cher Wang announced at the HTC VIVE China Strategy and Ecosystem Conference that it would invest $100 million to launch the Vive X Accelerator Program to support teams with creativity, technical capabilities and vision to continuously deliver high-quality content to the VIVE platform and the entire virtual reality ecosystem.

This is the third VR (virtual reality) summit held by HTC in China in the past six months. Domestic and foreign game manufacturers, chip manufacturers and channels have come to support the event, and in the VR experience area outside the venue, a large number of developers are queuing up to experience it. Can HTC, which is declining in the mobile phone industry, win a comeback through virtual reality HTC VIVE by seizing the Chinese market and VR?

Hand in hand Internet cafe

HTC VIVE opens experience store

"The China VR Content Competition, which just ended last week, had more than 800 software and content manufacturers participating in China. In just one month, there were 800 companies, which surprised me very much!" said Wang Congqing, general manager of HTC VIVE China. In foreign countries, such competitions have dozens or one or two hundred participants, which is already very good.

Compared with other VR helmet companies, such as Facebook's Oculus Rift, Sony's PlayStation VR and Samsung's Gear VR, none of them can compare with HTC Vive in terms of the importance and layout of the Chinese market. "In the next two or three months, HTC Vive will have two to three thousand different offline experience stores in China," said Wang Congqing.

"We conducted a recruitment campaign in Internet cafes across the country. Thousands of Internet cafes signed up in three days. Finally, 50 Internet cafes were selected in more than 20 cities for testing. Internet cafes set up a VR area where users can wear HTC Vive devices to play virtual reality games. Some games are free and some are paid." A person from Shunwang Technology told reporters. Shunwang Technology set up an experience area at the HTC Vive Ecosystem Conference, where 8 virtual reality games can be played. "The cost of the HTC Vive device plus the host is about 18,000 yuan. At present, the first batch of 50 Internet cafes are free to experience. After a period of trial operation, more outlets will be added. There will also be some high-quality games in the future, which are still under copyright protection." The person said.

It is understood that Shunwang Technology has tens of thousands of Internet cafes across the country, and has an independent charging system. Previously, the company signed an exclusive agency agreement with HTC Vive for the public Internet access market in mainland China, and plans to provide VR entertainment products and content in public Internet access places. If it can be rolled out nationwide, it will not only drive the sales of HTC Vive hardware priced at 6,888 yuan, but also solve the charging problem on the content side because Shunwang Technology has a game charging system.

For HTC, Shunwang Technology is just one of its key players in the Chinese market. Such partners also include Alibaba, Youku Tudou, iQiyi, Perfect World and NetEase on the content side, the three major operators, Leke VR and Xinling Communication on the service side, and Gome, Suning, Tmall and JD.com on the sales channel side. In China, HTC is weaving a large VR virtual reality ecological network.

"China will become a global base for VR in the next few years. From the perspective of smartphones, in just a few years, the most production, the most applications, the most users, and the most sales will be in China, and the same will be true for the VR field," said Wang Congqing.

Reversing the trend

The mobile phone market is saturated and needs transformation

Why is HTC working so hard in the VR field? One big reason is that the mobile phone market is becoming saturated.

In the past two years, HTC's voice in the mobile phone market has become less and less, and its market share has continued to shrink. The 2015 Global Mobile Phone Market Share Report released by market research firm TrendForce in January this year showed that the top ten mobile phone manufacturers had a cumulative market share of 81.2%, and HTC was not on the list. The share of the tenth mobile phone manufacturer was 3.1%, which also means that HTC's global market share is less than 3.1%.

Two weeks ago, HTC released its new flagship phone HTC10. Compared with the high-profile HTC Vive, HTC phones seem to be "unknown". However, its domestic version is called "castrated" because its configuration is lower than that of the overseas version, which has been criticized by the Chinese market. In April, domestic mobile phone manufacturers rushed to release a new generation of flagship phones, a camera, a fingerprint authentication, a charging socket... every detail is competing. As for foreign mobile phone manufacturers, Samsung has been having a hard time for a long time, and Apple has also begun to show signs of fatigue.

Competition among domestic mobile phones is fierce, and the entire mobile phone industry is beginning to slow down. I'm afraid that HTC10's sales in the Chinese market will not bring too many surprises.

"After 30 years of development, the PC industry began to decline around 2012. It took the smartphone market about nine years, five years to surpass the PC industry in terms of volume. Now the mobile phone industry has also begun to decline, with sales volumes basically decreasing every month or quarter compared to the previous year or quarter. The development of the VR industry from 2016 to 2020 has basically repeated the path of mobile phones replacing computers, but I believe that in four years, the output and sales of VR products will exceed those of mobile phones," said Wang Congqing, general manager of HTC Vive China.

For HTC, to reverse the downward trend, it needs to put more energy and resources on virtual reality (VR), and HTC VIVE has also become a bet for its resurgence.

Gold Rush in China

Foreign VR "stands up" for HTC

Of course, HTC is not fighting alone. It hopes to leverage global resources to expand the Chinese VR market.

HOLODIA is a French startup company, which also appeared in the experience area of ​​the HTC VIVE China Strategy Conference. "Our equipment is mainly sold to hotels or gyms. We sold 5 units in 3 weeks after the launch." A French guy told reporters through an interpreter. The company's equipment is actually fitness equipment. A person sits on the fitness equipment, stretches his arms forward and backward, and his body moves back and forth. But wearing an HTC VIVE is like paddling in a small boat on a river in a tropical area, surrounded by tropical scenery; or sitting in a glider, flapping his wings and flying in the air, surrounded by mountains, and playing games... After doing it for a while, I did sweat a little. "We hope to sell such equipment to the Chinese market." The young man said that the price of a device is about 75,000 yuan. "If it is placed in a gym, it may bring some traffic and increase the time users stay in the gym."

This Holodia company is just one of the companies that are making money in the Chinese market with the help of HTC Vive. A staff member of a company in Shenzhen showed reporters the experience of viewing cars in person through the HTC Vive device. "We are the exclusive agent of ZeroLight in China. ZeroLight is a set of car visualization interactive system. Through VR equipment, users can see the configuration and interior of the car in 360 degrees. They can also adjust the interior and color of the car in the virtual world, which is more personalized." At the scene, the reporter wore HTC Vive and saw an Italian luxury car, which was priced at 28 million yuan. Through the operation of the handle end, the user can open the door to see a line on the car seat, or see any screw and part of the car through the "explosion diagram". "Previously, at an exhibition in the United States, through such VR model display, 5 cars were sold during the exhibition." The staff member said that Audi has increased the customer flow of offline experience stores by 70% and the price of cars by 10% through this system. The Shenzhen company hopes that by introducing the system into China, it can also bring new experience to Chinese car sales. However, a set of ZeroLight models is not cheap. The model of the Italian luxury car costs two to three million yuan to make.

In addition to fitness and automobiles, game companies also hope to gain something in the VR field in China. The virtual reality game "Gunjack" developed by Icelandic game company CCP Games appeared in the HTC VIVE experience area. At the same time, Chet Faliszek, a gold medal producer of American video game developer Valve, "stood up" for HTC VIVE and expressed full support for its partner HTC VIVE. For these companies, the Chinese market, which HTC VIVE attaches great importance to, is a gold rush and has great temptation.

As a winner of Toutiao's Qingyun Plan and Baijiahao's Bai+ Plan, the 2019 Baidu Digital Author of the Year, the Baijiahao's Most Popular Author in the Technology Field, the 2019 Sogou Technology and Culture Author, and the 2021 Baijiahao Quarterly Influential Creator, he has won many awards, including the 2013 Sohu Best Industry Media Person, the 2015 China New Media Entrepreneurship Competition Beijing Third Place, the 2015 Guangmang Experience Award, the 2015 China New Media Entrepreneurship Competition Finals Third Place, and the 2018 Baidu Dynamic Annual Powerful Celebrity.