A hero's three gangs—many world-class companies have several close partners to help them achieve dominance in their respective fields. For example, Microsoft and Intel formed the "Wintel" alliance, while Google and HTC were once a powerful duo in the Android era. However, this year has seen a more subtle shift in the relationship between HTC and Google. Two months ago, Google invested $1.1 billion to recruit nearly 2,000 mobile phone R&D experts from HTC, who had been behind the development of Google’s Pixel phones for two generations. Beyond smartphones, HTC and Google’s collaboration in virtual reality also seems to be coming to an end.
At last week’s HTC Vive Developer Summit, HTC unveiled the latest VR headset, the Vive Focus, which was first introduced at the Google Developers Conference as part of Google’s Daydream VR platform. But on the same day, both HTC and Google confirmed that they would not launch Daydream VR. The split in their VR partnership is attributed by HTC to a focus on the Chinese market. However, it may also reflect Google’s lack of control over VR. With the industry advantage HTC has built over the past two years, the company is now shifting its VR platform from being a hardware manufacturer to operating independently.
At the Google I/O conference in May, Clay Bavor, Google’s VR/AR leader, announced that the company was working with HTC and Lenovo to launch a VR device equipped with Daydream VR. This device featured a front-facing camera system for space recognition and motion tracking, allowing users to move freely in a VR environment like the HTC Vive, but without the need for cables. Google called this technology “World Sense,†developed from its Project Tango initiative, which was integrated into the Daydream VR division this year.
On November 14, half a year after the Google Developers Conference, HTC revealed the Vive Focus, a VR all-in-one device that looked and functioned similarly to previous models. However, HTC executives later told the media that they would not launch Daydream VR. Google’s Clay Bavor also confirmed the news on Twitter, stating that the Daydream VR program with Lenovo would continue. Despite this, the future of Daydream remains uncertain.
Both Lenovo’s Daydream VR and HTC’s Vive Focus are based on Qualcomm’s VRDK solution, using similar components such as the Snapdragon 835 processor and a camera for space recognition. The difference lies in the tracking technology: Google uses “World Sense,†while HTC calls its version “World Scale.†The terminology suggests a disparity in technical maturity.
The announcement of the split was made informally—Google via Twitter, and HTC through reporters. This suggests that HTC didn’t place high importance on Daydream, and in fact, the platform hasn’t gained much traction. From the launch of Cardboard in 2014 to the Daydream VR display in 2016, Google aimed to establish itself in mobile VR. However, only flagship phones could support Daydream, limiting its reach. After nearly two years, fewer than 20 devices supported the platform, and sales remained low compared to Samsung’s Gear VR.
Even some Daydream partners, like Huawei, have deviated from Google’s design principles, creating devices more similar to Gear VR. This fragmentation mirrors the challenges Google faced with Android, but in reverse—Daydream lacked the strength to become a dominant standard.
After the VR boom of 2014 and 2015, Europe and the U.S. became saturated, making Asia, especially China, a key market. HTC’s decision to focus on China isn’t just a pretext—it’s a strategic move. Over the past two years, HTC has deepened its ties with mainland China, where it has established a leading position in VR. Consumers who bought HTC’s headsets became loyal SteamVR users, thanks to HTC’s room-level motion tracking.
Learning from past mistakes in the smartphone business, HTC has shifted toward building its own VR platform. It launched the Vive X project to support VR/AR startups, Vive Studios for content creation, and Viveport, a VR store. Recently, HTC introduced Vast Wave, a mobile VR platform developed with Qualcomm, aiming to unify China’s mobile VR ecosystem.
At the Oculus Developers Conference, Facebook unveiled the Oculus Go, a $199 VR all-in-one with no advanced tracking. In contrast, the Vive Focus is significantly more expensive, making it less appealing to consumers. However, HTC sees greater potential in the B-side market—enterprises, education, and healthcare. In 2016, HTC launched VivEDU, targeting the Chinese VR education sector, which is highly profitable and promising.
Many startups have secured millions in funding for VR education projects, and HTC collaborates with manufacturing, medical, and training companies to integrate VR into these industries. While consumer-grade VR devices are costly, they are affordable for commercial clients. By focusing on these markets, HTC can achieve significant volume, something Facebook and Google struggle with in China.
Interestingly, the initial partners on HTC’s Vive Wave platform include small players like Storm Mirror, Pico, and Iqiyi, but major domestic brands like Huawei, Xiaomi, and 3Glasses are absent. This reflects the difficulty of setting unified standards in emerging markets—something HTC now understands well.
The road to VR development is long, and HTC is still on it.
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