A lot needs to happen for HTC to stick around.
You haven’t bought one of its phones in years. And, frankly, you probably haven’t even considered one. Despite being one of the most popular Android partners for a significant period, the company no longer holds a clear identity. Consumers overlook it every time they’re shopping regardless of what HTC’s latest flagship looks like or how high-end the specifications are. We’re looking at a just another brand that can’t stand out alongside Samsung, Apple, LG, and second-tier companies like OnePlus.
Revenue is down to a record low, and there’s no sign of the company reviving itself. Figuring out how HTC got here isn’t difficult. Its grip was lost the moment metal and glass were no longer unique. Throw in an overheating processor scandal and dated designs, and now you know exactly why HTC is struggling.
Not keeping up with industry trends kills companies. Palm didn’t adapt, HP picked it up. Well it turns out HP knew practically nothing about the mobile industry. HTC, fortunately, isn’t blind. The tools are there. But HTC just can’t spend a ton of money on product development and marketing to launch a single device. That means it’s left wandering about aimlessly.
The logical solution, one that’s been explored before, is a sale. HTC’s mobile division holds patents and facilities that would be valuable to anyone. ASUS considered submitting an offer to purchase the company in 2015, but HTC refused to listen. Two years later, with its finances in an even worse spot, HTC needs to strike a deal. Only one company appears to be a perfect fit.
Google is HTC’s hero.
Reports coming out of Asia say the Taiwan-based company is in advanced negotiations to sell its mobile division to Google. If a deal is made, we’re probably six months to a year out from any real change for either company. That’s plenty of time for Google to let HTC run a few more products out of the pipeline, kill off long-term plans, and prepare for a true Google-made phone.
The two know each other well as they’ve co-created three devices in the last seven years and one more is on the way. HTC is responsible for 2010’s Nexus One, 2014’s Nexus 9, and 2016’s Pixel. The Pixel 2’s smaller model will also be manufactured by HTC. And remember the T-Mobile G1? It was the world’s first consumer-ready Android phone. HTC made that, too.
HTC gives Google access to a talented group of hardware and software engineers. We’ve already seen Nextbit and Essential poach HTC employees to create new products. Joining an ambitious start-up wasn’t their only motivation. These people wanted to go to a place where their visions could be funded through proper research and development. Of course Google is capable of bankrolling whatever it wants.
Before you start shouting about Google’s handling of Motorola, understand the difference between the situations. The mobile industry wouldn’t have been able to endure the loss of Motorola. It was the brand that put Android on the map. If it vanished, the platform would’ve been laughed at. Google bought Motorola in 2011 to keep it alive. The brand was resuscitated by getting rid of everything in the pipeline, starting from nothing, and rebooting with just one phone. You can say what you want about the decisions Lenovo makes today, but that has nothing to do with the incredible job Google did to revive Motorola.
HTC is an asset. Motorola was a project running as an independent company. HTC would be integrated into Google and likely see the brand phased out everywhere except maybe parts of Asia. Google’s plan is to restructure and become like Apple. HTC presents the opportunity to make that a reality a lot sooner than we thought.
Google hasn’t actually made a single phone, tablet, or smartwatch itself. LG, Huawei, HTC, ASUS, and Samsung have each contributed a Nexus device in the past. But, with the Pixel, the Mountain View-based company showed signs it wants to be on its own. Based on what we’ve heard, all HTC did was listen to Google’s demands and produce.
For 2017’s Pixel 2, Google has reportedly invested nearly $1 billion in LG Display to develop custom OLED panels. Not even Apple makes its own displays. There’s also a rumor the company is hiring to start designing a custom processor, which Apple does do. One of the key hires for the project is said to be a former Apple employee. Google isn’t trying to hide its goal anymore. We’re seeing the early stages of Google becoming a true hardware manufacturer.
Apple should remain calm, but it shouldn’t stand still. Google’s done a fine job releasing hardware assembled by other companies. A few years ago HTC made Android phones that had designs comparable to Apple’s iPhone. Being absorbed by Google can reenergize what made the brand special, and it’d be doing so for the eventual all-Google device. The phone will mark Android’s intersection of hardware and software, something Apple achieved a decade ago.
If Google does acquire HTC as expected, the arms race in the mobile industry will have officially begun.
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