Why Google's takeover of HTC could be Android's very own iPhone moment

The mere potential of this deal is enough to get the Android faithful excited about the future of the ecosystem.

 |  7-minute read |   09-09-2017
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Google, one of the biggest players in the tech industry, is planning to make a move to take over popular smartphone maker HTC. According to a report published in the Commercial Times, the Taiwanese smartphone maker, which has been facing financial troubles of late has decided to cut its losses and sell the company's smartphone manufacturing business to Mountview-based tech giant, Google.

The report claims that both tech giants have already held consultations and are currently in the final stages of finalising the landmark deal that will see Google buy all or part of smartphone maker HTC. Under the reported deal, Taiwanese manufacturer will still continue to own and operate the HTC Vive – its profitable virtual reality business – even after the takeover is complete. 

As of now, both Google and HTC have chosen not to respond to the report that's creating ripples across the tech industry, but regardless of this silence, a deal, Commercial Times says, could be reached at by the end of the year.

The takeover, if it indeed ends up taking place, will be of great significance as it could change the course of the smartphone industry going forward. Apart from possibly being the final piece of the puzzle that is how to end Apple's influence over the mobile phone market, Google buying out HTC's smartphone business would also represent things coming full circle for a partnership that initially saw this little-known smartphone maker take up Google Android OS to produce the first Android-based mass market smartphone – the HTC Dream in July 2010.

But before we hop on to the nostalgia train, let's talk about why the move would represent a win-win for both Google and HTC. 


The last hope for HTC's ailing business

From developing the first mass market Android phone in 2010 to crafting the brilliant U11, the Taiwanese mobile phone maker till date remains popular with its legion of fans who swear by the brand's ability to wow users with its smartphones. However, HTC's failure to translate this love into hard cash has brought us to this day where tech giant looking to give up its flagship business.

HTC, which only a couple of years ago enjoyed the status of being Samsung's greatest rival in the Android phone market, sees itself looking down the barrel as the company's revenues plummeted to the lowest in 13 years in August 2017.

According to DigiTimes, HTC has reported consolidated revenues of NT$3 billion (US$99.69 million) for August. The revenue also represented a decline of 51.5 per cent from the previous month and 54.4 per cent from a year earlier.

What's worse is that these numbers do not just paint the picture of a bad financial year for HTC, but rather are reflective of a grimmer reality. For the smartphone loyalist who is still hoping for a turnaround, the sad reality remains that things only look to be going from bad to worse for HTC, which has already seen its share prices nosedive below their valuation in 2015. By continuing to remain in the business, HTC is only scraping the bottom of the barrel. 

HTC is essentially dying, and by taking up Google's reported offer, it would be giving the much-loved brand one final chance to stay afloat in what is possibly a new avatar.

This will also enable them to focus on their Vive headset business that has been changing the game in the VR space. 

Google's answer to Apple's domination

Talking about Google, this would represent a move that lays the groundwork for their eventual assault on Apple's influence over the smartphone market. Google – the company behind the world's most used smartphone OS, Android – has for long been looking at ways to bring to its consumers a kind of refined and tailored experience that Apple's iOS provides. 

Over the years, in Apple like fashion, it has tried to push the Android ecosystem by taking a more hands on approach. A shift in strategy has seen it attempting to end the fragmentation that exists in the Android smartphone market by pushing for a more standardised stock user experience across the industry.

However, because of the structure of the Android market, Google has found roadblocks in its attempts to replicate Apple's success based on its complete control over the hardware and software within the iPhone ecosystem. 

To fix the problem, the Mountview based tech giant has partnered with multiple tech companies to create Google branded hardware that attempts to replicate the iPhone's like deep level of integration of the OS with the hardware. 

After the failure of the Nexus devices, Google now has put its weight behind the Pixel lineup to find the answer to Apple's domination. However, with the Pixel phones also being manufactured by third party vendors, it looks unlikely that Google will be able to replicate the iPhone's success. 

And this is exactly why the Google acquisition of HTC could serve to be the final piece in the puzzle to breaking the charm that Apple cast on the market when it announced the first iPhone in 2007.


Android's iPhone moment

After its premature attempt at doing the same in 2012, when Google acquired Motorola Mobility in a $12.5 billion deal only to sell it off 3 years later for over a $9 billion loss, taking over HTC in 2017-2018, could help Google give the Pixel lineup the ammunition it needs to take the iPhone down. 

With the creation of its own devices becoming a part of its core philosophy, and HTC already manufacturing the first Pixel device, buying out the smartphone division of the Taiwanese smartphone maker would only help Google in providing a baseline “true” experience that it cannot by working with different manufacturers almost every year.  

The shift with every new Pixel phone – as was seen in the case of Nexus devices – would represent a shift in user experience that will only hamper Google's plans. With HTC under its wing, Google can focus the smartphone maker's energies into creating just the Pixel devices year after year.

It can even start focusing on tailoring its OS to suit the Pixel devices in a way it has not managed to do before.

This move could free up the caged bird that the Android OS is, and let it shine by enjoying a deep level of integration with the in-house hardware of the Pixel devices.

Google's engineers working with HTC's team could create Pixel devices that are as refined and as tailored – if not more – for Android as the iPhone is to iOS. 

HTC is also known for bringing some of the most brilliantly designed phones that the Android market has known. With this acquisition, Google will also get access to this resource along with thousands of design and technology patents that could further forward the Pixel's cause. 

Coming full circle

Though the deal looks to be moving more towards the realm of probability than possibility, the mere potential of this deal is already enough to get the Android faithful excited about the future of the ecosystem. 

That said, there is more to this deal being Google's very own iPhone moment. In all this, we need to take a moment and also look at how things have come full circle in this partnership.

If Google indeed ends up acquiring HTC's smartphone business, it will also be swallowing up a brand that started the whole Android revolution in the first place. It was HTC, that with its the dream in 2010, first brought the Android OS to the masses, and now with this takeover, it will come to an end, or as was the case of Motorola, go on existing in a different form. Poetic, isn't it?

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Sushant Talwar Sushant Talwar @sushanttalwar

Tech journalist, DailyO

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