In case you missed it this week, Google had a rather large purchase involving another player in the smartphone world. They purchased…part of HTC. Yes, part. Not all of it. It wasn’t a trivial expenditure though. It cost Google $1.1 billion in cash. The bigger question you may have is what does this mean for both companies moving forward, and we’re here to help you with some possible answers.
What It Means For Google
Let’s start with what they actually bought in this deal. Google will absorb a portion of HTC’s core hardware team that was already involved in the design and manufacturing of the Pixel phones. They also acquire licensing for certain undisclosed intellectual property from HTC. The first is the biggest splash. Google is a mammoth company, but they are not traditionally a manufacturer of consumer products. Google’s had some trips and falls with their hardware launches. This talent infusion can help tighten up that process.
Much like their takeover of Nest, Google has their sights set on making their own hardware in-house moving forward. The HTC buy is all about streamlining this process without the need of external help from a manufacturer. They will acquire in a matter of months the design, R&D, and supply chain expertise that HTC has spent decades curating. From phone design to better LTE hardware and radios, those employees help Google strengthen their hardware prowess from start to finish.
What It Means For HTC
The short answer is money. They receive an immediate financial shot in the arm to continue without the need for a complete buyout option. Long-term, the company says they will continue to create and develop their current product lineup. Vive will continue. A successor to the HTC U11 is already in the works. One would also think that this deal will only strengthen their partnership with Google when it comes to HTC-built Android devices. Whether it means earlier access to new software versions or sharing hardware innovation, HTC may have a front-row seat.
What It Means For Us
Hopefully, this monster transaction will result in better products from both sides of the checkbook. HTC gets a huge chunk of money to continue their efforts in making traditionally really good smartphones. I would always rather see competition get stronger rather than limit the options on the shelves for consumers. Maybe this new revenue helps HTC make that next great product they otherwise wouldn’t have and keeps them from going bankrupt. And as for Google, we should see a finer-tuned result in their mobile devices. The Pixel line is already pretty solid, but with the help of the former HTC members Mountain View can really step up their hardware game over the next few generations.