Asustek Computer Inc, the Taiwan-based company known widely as Asus, appears to be doing some window shopping—and it’s eyeing fellow Taiwanese tech maker HTC, Reuters reports.
The brief story’s careful wording stops short of declaring the former’s intentions, stating that “[Asus] has not ruled out the possibility of acquiring struggling smartphone maker HTC Corp.” Reuters attributes the comment to Asustek Chairman Jonney Shih, who fielded questions about the topic at his company’s annual general meeting.
Interest in the matter would have barely registered this time last year. HTC has gained a reputation as a maker of very decent phones that somehow fail to garner big sales. But a few months ago, the underdog just made its biggest and boldest play yet with its new virtual reality headset, the Vive.
The Prospect Of A Re…Vive
By and large, the Vive virtual reality system (a joint project with gaming giant Valve) surprised the industry by offering what has been hailed as the best consumer VR experience yet.
The announcement pulled the rug out from underneath companies like Oculus and Sony, particularly since HTC promised to deliver a consumer version of the headset by the end of this year. Both the Oculus Rift and Sony’s Project Morpheus VR goggles won’t be available until 2016.
An Asus-made Vive could accelerate interest even further. After all, plenty of signs point to this potentially being a great match.
Asus may be best known to consumers for its Eee series devices, Padfones, Zenbooks, and ZenWatch smartwatch, but it makes all sorts of hardware. Its product lines cover computers, mobile devices and other gear, from networking equipment to components. The latter includes LED/LCD panels, monitors, and sound and graphics cards—all of which could come in very handy for a virtual reality tech company.
Asus’ Fascination With VR
It’s not entirely clear what Asus could bring to HTC’s mobile efforts; its smartphones and tablets don’t lead the market either. Virtual reality could be another matter entirely.
Asus dabbled in it early on, with the Asus VR 100 3D glasses. The device didn’t really make a dent, but to be fair, it was more than a decade too early. Plus, the technology seemed incomplete, even ancient, compared to the advances these days. (Really, the VR 100 “shutterglasses” was more about 3D gaming than the sort of immersive virtual reality environments we’re seeing now.) But it established Asus’ interest in fleshing out virtual experiences, long before Samsung’s Gear VR, Oculus Rift, Sony’s Project Morpheus, a burgeoning crowd of startups or even Google Cardboard swarmed the scene.
VR has become one of the hottest emerging technologies, in large part because it could represent a leap forward in gaming. Asus already has experience appealing to those ranks, thanks to “Republic of Gamers”—the company’s brand that promotes computer hardware, peripherals and accessories specifically targeted toward PC gamers.
Asus has the technical chops to make the most out of the requisite visuals and audio—it could even develop a whole Vive-optimized system—while HTC could benefit from the expertise, as well as a parent company with deeper pockets. (According to Gartner, after Lenovo and HP, Asus is the third-largest PC vendor by unit sales last year.)
Even so, Chief Financial Officer David Chang did his best to manage expectations—even throw a little cold water on things: “[T]he chances of an actual takeover are not big…,” he told Reuters. But his simple statement seems noteworthy, if only because it’s not a denial. Tech companies are usually quick to nix rumors or, worse, go into silent mode over potential deals. Chang’s comment was neither—which almost certainly means it’s still very early days.
HTC may be lying in wait, crossing its fingers that Shih wasn’t blowing hot air. Because an acquisition deal could be the best-case scenario—for both HTC and its already growing Vive fanbase.
Update: HTC denies that it would welcome a new corporate overlord, at least publicly. “We didn’t contact Asusteck and will not consider the acquisition,” HTC said, in a statement. That doesn’t mean its tune wouldn’t change in the face of an actual deal, if it comes to that. But for now, it’s doing its best not to look weak—whether to refute the chatter, as it says, or possibly to keep a poker face in the run-up to future negotiations.
Photo by Adriana Lee for ReadWrite