The keys to the possible sale of HTC to Google

Google wants to continue growing in mobile hardware, and buying HTC can give you the push you need to get handsets with real value added thanks to the vertical integration that others lack.

There are no good times for HTC. The bad situation of the Taiwanese company is a fact, after the commercial failures of all the flagships that have happened to the HTC One, launched there by 2013. Immersed in a vicious circle, the company took a step forward betting with Valve by the reality virtual, one of the trends of the years to come. Without this having worked as expected, HTC has continued to make some of the best smartphones, such as HTC U11 or Google Pixel, but has also been in vain.

Such a negative context has caused HTC to analyze different options, such as the possibility of dividing the company into two parts, one dedicated to virtual reality and the second the classic, dedicated to smartphones. According to Bloomberg, acquiring the entire company is not of much interest to a single buyer, while an actor as important as Google would be very interested in acquiring the mobile division, and is that the company is now worth a fifth of what it was worth five years ago.

After a few weeks, it seems that the process is in its final phase, and Google is closer than ever to acquire the company that last year made the Google Pixel and in its day the Nexus One, being also the manufacturer that bet more by Android in its beginnings, with terminals as representative as the HTC Dream or HTC Magic.

The Sense of Operation for Google

One month after the presentation of the second generation of Google Pixel, according to reliable sources, will be manufactured by LG, Google needs to be, anyway, a gap within the leading smartphone manufacturers, both product quality and recognition and desire of purchase by the users. The latter is something that never got with the Nexus, but that was not the function of those terminals to develop.

With the Pixel is different. Google is making a very strong bet on the hardware, as evidenced by the development of a chip itself (with hiring as important as that of a leading engineer of the chip equipment Apple ) or the investment of 880 million dollars in OLED screens.

To this must be added the work of the image team , which through improvements based on the computer photography has made that if we consider that everything that came from Google in the field of photography was mediocre (rightly), has moved to place the results of the Pixel cameras among the best on the market, with an HDR + mode that, along with Apple's portrait mode, is probably the most coveted feature of the mobile photographic landscape.

The Nexus had never added value, nor did they pretend. A generated value in the generic, as today, tries Nokia. The Pixels are having a bit of it, and they need to get a lot more. A union with HTC could be key for the entire gestation and production process of the terminal to be vertically integrated, giving Google much more power to control its product and getting to the level of Apple in it, because neither Samsung nor Huawei control the software beyond the layer of personalization that they apply.

Google is shutting down Android or making its open part less and less interesting, and giving exclusive features to the Pixel is key to generating appeal. Uncontrolled, these functions are nothing more than a vague exclusivity of Google Assistant, which, like most attendees, is still not a Verde mobile.

Pixel need added value beyond HDR + and artificial exclusivity like Google Assistant, and HTC may be one of the keys to achieving it From this point of view the operation seems to make a lot of sense; HTC can be bought at balance price and there are needs to palliate. However, if we add the word Motorola to the equation everything is thin, and it is necessary to remember that after buying Motorola Mobility for 12.5 billion dollars, Google "gifted" Lenovo for 2,910 million dollars. If they needed a strong manufacturer, why not take advantage of what they had at home?It looks like a succession of relatively short-term moves, but what we know for sure is that in 2014, Google did not have the same priorities as now, which are even more distant from the ones it had in 2011 when Motorola bought it. The first point of purchase was to take over the huge amount of patents that the then American company had in a time of total war between Samsung, Apple, Microsoft, RIM, Nokia, Oracle, and others. The future of Android was hanging by a thread and Google had to make sure. In that sense, the acquisition of Motorola was even cheap.

With most patents secured (still in the hands of Google), and even plans to end the Nexus, Motorola was no longer such a valid asset, and having it could detract more than contribute. The possible purchase of HTC would no longer have to do with any of this but to gain control over great professionals to work, by surprise, under the command of Rick Osterloh, current director of mobile hardware at Google, the same position he held in Motorola and Lenovo. It is easy to see all the good that would bring a union like this, at a time when distinguishing is increasingly complicated.

The Sense of Buying for HTC

As we said, HTC is not doing well, and the string of losses seems to have been tightened to the limit definitely, after many shareholder ultimatums to management teams in recent years, some of which claimed heads like Peter Chou. Despite the love that has always shown its founder, Cher Wang, losing such large amounts of money makes no sense, and passing into Google hands may be the best outlet for such a good team.

Perhaps staying with the virtual reality division while waiting for lower prices to allow its popularization is a business that in the long run may be more lucrative, although as an Android maker, HTC has more than learned the lesson that manufacturing at small margins seldom gives benefits today.

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