HTC Corp (宏達電) shares jumped 9.09 percent in Taipei trading yesterday, as investors welcomed the company’s decision to significantly reduce the price of its virtual reality (VR) headset to stimulate sales of the device.
HTC on Monday announced that it would slash 25.03 percent off the price of the Vive, from US$799 to US$599, with immediate effect in an effort to make its VR system more accessible to the global market.
The Taiwanese company’s move came after its VR rival, Facebook-owned Oculus, last month initiated a six-week sales promotion, reducing the bundle price of its Oculus Rift and Oculus Touch to US$399 from their respective prices of US$399 and US$99 since March.
HTC’s stock price closed higher at NT$67.2, after retreating from the daily high NT$67.7 in early trading.
A total of 25.66 million shares were traded during the session, with buy orders of 231,000 shares to be executed in today’s session, Taiwan Stock Exchange data showed.
“HTC and Oculus’ decisions to lower their prices could stimulate end demand for VR devices, which is positive for the VR industry’s development in the long term,” Yuanta Securities Investment Consulting Co (元大投顧) analyst Jeff Pu (蒲得宇) said by telephone.
However, Pu said the strategy of offering low-priced devices might benefit shipment momentum, but it also raises the threshold for HTC to see its VR business break even.
Pu said his early forecast of shipments of about 1 million Vives per year to break even has changed to at least 1.2 million devices under the new pricing structure.
While HTC is investing to expand the ecosystem for its VR business, Pu said to maintain the sales momentum, HTC needs a breakthrough in its VR technologies, such as evolving to a cordless VR devices to create a true immersive experience for users.
HTC chairwoman Cher Wang (王雪紅) has more than once said the company believes that its VR business will become the firm’s main growth driver in the foreseeable future, but she has never set a time frame to achieve the target.
The company has continued to linger in negative territory in the second quarter of this year, posting a ninth-consecutive unprofitable quarter, or net losses of NT$1.95 billion (US$64.36 million), for last quarter.
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