HTC doubles down on virtual reality with new Vive X accelerator

Company to lead $100 million accelerator fund

htc vive

HTC on Tuesday announced it will lead a $100 million virtual reality accelerator fund to cultivate the VR ecosystem by supporting startups.

The move could be another boost to the development of enterprise applications and uses for VR, analysts said. VR is already being used in areas such as the training of surgeons, astronauts and combat troops who can use VR to simulate conditions and challenges they will face in the future.

Last week, HTC announced a partnership with Dassault Systemes, which the company said was specifically designed to drive VR into the enterprise space.

In the most recent announcement, HTC said it will lead the investment fund, called Vive X, but didn't name its partners. Startups will get access to VR expertise, advanced VR technology, mentorships, financial investments and go-to-market support, HTC said. A website has been created to sign up for the program.

HTC also makes the Vive VR headset, priced at $799 for the full system. That compares to $599 for the Oculus Rift system.

Vive X will start in Beijing, Taipei and San Francisco and expand from there, HTC said. Selected startups from Asia will be invited to apply to the Beiing pilot of Vive X in May.

While the Vive X project sounds ambitious, analysts warned that virtual reality is still in its early days and is probably a decade away from mass adoption, especially in the enterprise. There are questions whether HTC, which faces problems marketing its smartphones, can last long enough to take advantage of the promise of virtual reality.

Even HTC CEO Cher Wang said in a statement, "Virtual reality is changing the world, yet to do that effectively it needs a healthy eco-system to expand into the mass market."

Tuong Huy Nguyen, an analyst at Gartner, said HTC faces a "tough road" with its VR initiatives.

"We're still in the early days of VR pilots, and it's not yet a turnkey solution," he said. "Companies that want to implement VR don't want to do it a la carte, or having to figure out what headset to use, and what 3D capturing tool or which work flow software. They want somebody to streamline things and drive innovation and ideas. The best way to go [for HTC] might be to design specific vertical industry content."

Nguyen said he interviewed a doctor at the Ronald Reagan Medical Center at the University of California at Los Angeles who is already working with other doctors using VR to prepare for brain surgeries. "The doctors get to take a dry run a few times, so when they are in your head, it's like déjà vu to them," Nguyen said.

The medical center is also using VR to diagnose prostate cancer, which has improved diagnosis accuracy by 300%, according to Erick Dutson, a surgeon there who was cited in an article in the Physicans News Network. The VR in that example relies on 3D images produced by MRI machines and ultrasound.

"HTC's overall efforts on the VR side are very promising," Nguyen said. "There is a place for immersive tech in the future, but the caveat is that it's a long road. It has a number of uses for enterprises and consumers."

He noted that HTC faces a fiercely competitive Android smartphone market, even with phones like the new HTC 10 that won some rave reviews. "The question is whether HTC can sustain itself long enough to reach success with VR," he added.

IDC last week said the market for VR hardware, including Vive headsets, will "skyrocket" in 2016, reaching shipments of 9.6 million globally. Samsung and Sony are key players, as well as Oculus and HTC. IDC also predicted that VR hardware will grow to nearly 65 million devices shipped in 2020.

Copyright © 2016 IDG Communications, Inc.

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