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Google Buys HTC Yet Even Nokia Managed to Sell More Phones!

8,961

HTC is proud to have been partnered with businesses for over 60 years.

Operating income‎: ‎TWD 19,8 million (2016)

Bloomberg reports that HTC is considering its own mobile operating system to compete with Apple’s iOS, Google’s Android, and Microsoft’s Windows Phone. On 21 September 2017, HTC announced a transaction with Google, and according to another source Google has spent $1.1 billion (£815 million) to buy in an estimated 2,000-person research, development and design team from Taiwanese smartphone maker HTC

Going back in time:

Google’s relationship with HTC dates back to the earliest days of the Android operating system. Seven years ago, HTC was the first company to make a commercial Android phone, in the form of the Dream, which could get to the internet and was called a smartphone. The same year, HTC took a 10.7% world market share. But this success was followed by a tough journey owing to different reasons including competition and lack of sales channels in markets.

Now that Google wants to add hardware to software to increase the growth of android manifold. Google isn’t buying the whole of HTC, just a relatively large part of the Taipei-based company’s smartphone business and not its Vive virtual reality headset business

Google’s announcement:

Senior vice president of hardware at Google, Rick Osterloh, affirmed the heightening importance of in-house hardware development to go with Google’s Android operating system. “Creating beautiful products that people rely on every single day is a journey, and we are investing for the long run,” he said.

Expert Opinion:

The current deal of selling 2000 personnel is being seen as the smartest smartphone move in last 5 years.

Analysts have responded positively to the announcement. Thomas Husson, VP and principal analyst at Forrester said, “Acquisitions of key HTC assets will give them the hardware technology expertise, the design skills and the experience in smartphone retail distribution they badly need” But he also had a word of warning: “Despite acquisitions of Motorola and Nest and a strong hardware push a year ago, Google has not yet been successful at selling consumer devices.” Neil Mawston says, “HTC is being saved from financial collapse, while Google will get access to HTC’s modest pool of patents, its well-known software expertise and remaining distribution relationships with major carriers like Sprint in the U.S.”

Thomas Husson, Vice President and principal analyst for Forrester, said: “Two weeks ahead of the likely announcement of new Pixel smartphones and other emerging hardware devices, HTC’s acquisition illustrates Google’s commitment to the consumer device space. The official release of new products on 4 October is likely to demonstrate that Google is finally serious in developing a more tightly-controlled device ecosystem.”

McQueen said: “What is in Google’s favor this time is that it is buying just a part of HTC, and it is a part that can help it deliver smartphones with a premium, elegant industrial design while also providing much tighter integration between hardware, the Android OS, and Google’s services.”

For Google, plenty of web administrations is the primary core interest. From Gmail to Google Play to the most recent participant in the arrangement, Google Assistant, it’s tied in with keeping individuals inside the Google biological system. The additional time individuals go through with Google items, the more data the organization can gather and the more potential contact directs it has toward offer publicizing.

For Gartner analyst Annette Zimmermann, the decision is about getting all the necessary technology in-house, rather than relying on partnerships. “This is different than when Google bought Motorola – they were after the patents then. This is for Google to expand its hardware business to get the hardware, software, experience and AI all optimized in the smartphone. I think Google is particularly going after Apple and Samsung in the US market.”

While it’s highly unlikely Google will abandon Android’s open source roots and wide third-party hardware market to adopt an Apple-style model with absolute control over what hardware its software runs on, we could soon see more innovative features that are released first, best and possibly only on Google’s own hardware.

Where HTC stands in this fiasco

The injection of $1.1 billion will definitely improve the firm’s liquidity, although the transfer of about half of its research and design staff, down from around 4,000 to 2,000, may force HTC to narrow its development focus in the immediate future. Publicly, HTC has said the deal with Google supports the company’s “continued branded smartphone strategy, enabling a more streamlined product portfolio, greater operational efficiency, and financial flexibility”. In plain English, that means HTC will continue to make its own phones, but lose a significant chunk of its staff to Google.

HTC might not be able to peak the market all the same again, but it might produce some extraordinary, high-end smartphones. Technical experts expect something as odd yet tempting as a squeezable smartphone.

Google and HTC said in a statement, a lot of the staffers who will change companies when the deal takes effect next year have worked on the Pixel and that to support pixel development, Google will continue to have access to HTC intellectual property.

Future Prospects:

What Google has finished with its HTC bargain is purchase the ability that made a year ago’s Pixel cell phones, bringing the group capable in-house.

Geoff Blaber, vice president of research, Americas, for CCS Insight said: “As computing, AI and search become pervasive, Google needs to ensure that it can deliver its services as seamlessly and broadly as possible. That requires deeper involvement in hardware”

Whether it’s a speaker, a smartphone or a computer, in an increasingly competitive landscape, Google needs much better integration between hardware and software if its services are to continue to thrive.

Meanwhile, with a dedicated hardware team fully under its own control, Google is better positioned than ever to develop technology that relies on a close relationship between hardware and software.

References:

TheVerge

TheGuardian 

Wired

TheGuardian 

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