Google in talks to acquire HTC’s smartphone business

HTC has had reverses in its smartphone sales and has been posting losses for the last nine quarters.
Google in talks to acquire HTC’s smartphone business
Google in talks to acquire HTC’s smartphone business
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At a time when competition in the smartphone market is soaring, reports suggest that Google is planning to take over the smartphone business of the Taiwanese major HTC.

While there is no official confirmation yet from either side, there are sufficient grounds to believe such a move is indeed in the offing.

Despite HTC’s smartphones gaining popularity, HTC has had reverses in its smartphone sales and has been posting heavy losses, one quarter after another. In August 2017, HTC reported a loss of $64 million, which was the ninth consecutive quarter it posted losses in.

The last flagship, the HTC U11 and the U Ultra before that, were devices rated very highly in the market, both in terms of the hardware and the phones’ performance. However, HTC could not achieve the kind of sales volumes, internationally, the way leaders like Samsung and Apple could attain.

Google’s association with HTC dates back to the time when the first Android phones were built by HTC. Even now, Google has staked the immediate future of its Pixel range of smartphones on HTC.

After discontinuing its Nexus brand, Google announced its own Pixel and Pixel XL last year. And while the smartphones were a major success, Google fell short of enough supply. HTC can now aid Google in manufacturing for its next Pixel smartphones.

From a business perspective as well, it makes sense for Google to add a resource to its strengths for some of the components used in the smartphones, like in the optics and the audio departments, where HTC already has made investments and could be exploited in the future.

And this is not the first time Google would be making a similar move. It also took over the mobile phone business of Motorola and subsequently sold it to Lenovo. One of the advantages Google enjoyed was a number of patents owned by Motorola then and the same could happen with HTC now.

Some reports suggest that Google’s acquisition of HTC will be a temporary arrangement to see the Pixel launch and manufacturing through. But no one can discount the benefits that Google will gain by having a hardware manufacturing base at its disposal.

While the deal is said to be in the final stages, one will have to wait for the official announcement to be made.

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