If this purchase happens, it will almost certainly not include Vive, from my understanding. Reports today said mobile phone business only. And Vive is being considered for selloff as a separate company.
I'd say that Google is not interested in the phone business. After all, they did have Motorola Mobility [1].
As other said, they are after the VR stuff, and any sale will contain that bit. They will let phones run a bit, then either sell it at a bargain to other manufacturer ( Lenovo? ) or let it slowly ( or abruptly) die.
HTCs stock price has tanked in the last 5 years. They laid off 15% of their employees last year. Finally their market cap is about even with their cash in the bank so buying them would be essentially free. Finally, they make the Pixel so Google has worked very closely with them recently.
Would the other smartphone makers be happy that their OS be in control of a direct competitor? I would assume the first thing Samsung would do is to branch Android.
Samsung didn't do anything about Google buying Motorola. And that was at a time I'd argue Samsung was much less dominant in the market than it is now. They don't have a whole lot to worry about.
Right, but did it lead to taking Tizen to the level it could replace Android? What I like about Samsung is that they do realize and accept that the software is not their forte. Hence Android.
Samsung is keeping Tizen about where Microsoft seems keeps Windows Mobile right now: Keeping it more or less up to date in case the landscape changes and they have an opportunity again.
Google deciding to change something is one of Samsung's biggest corporate risks since they're so dependent on them with the phone business.
If there's a gold rush, sell shovels. I can see no other viable reason for Google to buy HTC. They surely don't want to manufacture phones. I can't think of any major patents HTC holds on the mobile arena, can you? There was a recent article about their phone division having financial trouble.
Most likely they will throw out Android alltogether, and move to what has been their "wartime airfield" - tizen, which they kept funded and alive all those years
For the app ecosystem, I wonder if webassembly isn't going to even the game between the different OSes. You will be able to code in a single language of your choice an app with fast performance that will run on every platform, current and future. iOS allows you to pin a webapp to the desktop which then looks in every way like a native app, I presume android must have something similar.
>Unlikely -- Tizen would be dead on arrival, being inferior in all ways to Android, including the app ecosystem.
Would it matter when "an Android phone" means a Samsung phone 9 times out of 10 in Western markets
When an average American comes to Best Buy to buy a phone, he does not deliberate over things as abstract to him as OS of a phone. He sees an Apple phone, a Samsung phone, and a random Chinese phone.
They botched the Motorola acquisition and couldn’t find a way to integrate them in their mobile efforts even though both were American companies (with Moto having a significant presence right across from GOOG in the Valley).
So now doing it all over again, with a Taiwan-based company is going to work better because...?
Because they've done it before, they'll have learned from their mistakes and will attempt to avoid repeating them.
For example, they put in place a firewall to ensure that Motorola wouldn't have any advantages over other Android manufacturers. I don't expect them to do that again.
That being said, major acquisitions are hard and I expect it to fail once again. But they'll mostly make different mistakes rather than the same ones they made last time.
Dropping the Android Firewall ? if Google does, would any future partners trust it and collaborate with it ? and without that, many of Google's efforts, including it's moonshot, will have much lower chance of sucsess. Would they risk that ?
Where else would the Android handset makers go, Microsoft?
Actually that sounds good, we could do with a third viable handset OS, but that's a digression and at this point a bit of a fantasy. They have nowhere else to go.
Back in the early days of iOS and Android the consensus seemed to be that the smartphone OSes were pretty much done. To compete with iOS all you had to do was match it's features, or catch up, and once you had it was pretty much all over. Since then Apple and Google have constantly found compelling new features for the OSes almost every year. Apple is sinking billions into the development of iOS, just look at what they're doing just in the area of health[1], and there is clear blue water in terms of quality and features[2] between it and Android, and that gap is increasing.
Google makes most of it's money in mobile off the iOS platform, yet is investing hugely in Android development and making a pittance out of it. Not only is that unsustainable, but if they really want to compete with Apple they need to dramatically increase their investment in Android. They only way they can justify doing that is to actually start making significant revenue off Android. The only way to do that is to sell their own handsets, differentiate them from competing Android handset vendors, command a decent profit margin and grab significant market share.
[2] Super robust and secure XPC; Superior power management; Custom development tools, languages and hardware-software integration with things like Metal and the motion co-processor; High quality health and fitness tracking; VRKit; Highly consistent calibration of sensors between devices, vital for precision applications like VR; All this is arguable in the details, sure, but the fact that Apple is spending hugely on this backed by blockbuster revenues isn't and Google can't realistically match that just for the heck of it. They need a revenue stream to back it up.
Google has tens of billions a year in revenue from Android. Only in comparison to Apple revenue or Google's advertising business can that be called a pittance. :)
In a 2016 court filing it was revealed Google made $30bn on Android in the 8 years since 2008. Their annual revenue in 2016 was $89bn, of which 87% was from search. Half of that is from mobile, but 90% of that comes from iOS so Android search revenue is about $7bn. On top of that they make a few bn from the Play store. So their total Android related revenue is probably about $10bn a year.
So no, Google do not make tens of billions a year off Android. They may possibly make a profit off of it of a few bn a year, but that's about the best we can say. On the other hand they pay Apple $3bn a year just to be the default search engine in Mobile Safari. That's how big the gulf is in the mobile market between them and Apple. They make about 4x as much money off iOS as they do off their own operating system. If I was running Google there's no way I'd consider that acceptable, because all that iOS revenue is at Apple's discretion.
At this point, all smartphone oems selling Android devices, do they really have a choice?
Android is too big. The oems are too invested. They need Google. Google on the other hand, could flip the switch one day and say that they do not need them anymore.
Was it botched? I'm not sure the intention was to ever run Motorola as a going concern. After selling the cable/home biz, cash on hand, deferred taxes, and selling the phone biz to Lenovo, they lost just $3.5B. But they kept all of the patents, defending Android from legal assaults into the future.
Right, and they put out a generation of near-stock Android phones with the Moto E/G/X line that did a great job putting Android in as many hands as possible and setting the standard for low and mid range phones.
As they were doing that I remember thinking "these phones don't make much sense for Motorola in terms of generating a profit, but they make perfect sense for Google in terms of blanketing the world with Android phones."
I'd say Google was quite happy with what they were able to do while they had Motorola.
If that was the intention from the beginning they would have divested the smartphone business immediately rather than doing it 2.5 years later.
It's likely and possible that the patents were the primary purpose for the acquisition. But they put too much money & effort into the handset business to suggest that they never intended to make a go of it.
Google should just stick with making their premium pixel product to showcase their technology. HTC mostly makes low-margin, decent quality phones in a large quantity. That doesn't seem interesting to Google.
> low-margin, decent quality phones in a large quantity
That's been interesting to HTC to now. Doesn't mean they can't make a premium phone to showcase Google's tech, but just that their flagship attempts haven't moved the needle compared to the incumbents (and more than likely fair to say the Pixel hasn't either).
And, well... HTC was the contract manufacturer for the Pixel... so there's that.
I think this is Google shooting itself in the foot.
TechAltar on YouTube provides a very good explanation of why Samsung (and probably other phone manufacturers) are cautious of Android[1]. This is especially true when Google acts as a hardware phone manufacturer.
The summary of the argument (from memory) is that Google provides Android to hardware phone manufacturers, and it doesn't compete with them in the hardware space. Google owning Moto (and now HTC?), makes Google a direct competitor with hardware phone manufacturers -- which you could argue are its main customers in the phone market. Google can give Moto (HTC?) unfair advantages because it owns/controls Android; even if it's not done maliciously (e.g. having access to Android source before it becomes public).
> I think this is Google shooting itself in the foot.
Only if it fails. I'm sure this is making Android phone manufacturers nervous but what are their options? Essentially, Samsung would need to revive its mobile OS platform and build a competing ecosystem. That's a huge gamble that's already failed multiple times.
It strikes me that it's more likely that they'll take the same dichotomous approach as they do with selling chips to Apple. My guess is that Google are assuming the same.
Google stands to lose nothing of value whatsoever from pissing off the Android handset makers. Especially since they've made no bones at all about pissing off Google the second they could gain even the slightest sliver of a competitive or revenue advantage from doing so. Frankly Google owes them zilch. In fact having a viable handset business of their own might even give Google more leverage on the licensees. Want these premium features for your phones too? Talk to us, what do you have to offer?
This can't be about direct revenue. We all know that Android handset business is barely profitable. Even Samsung makes a fraction of what Apple does, and the rest are rounding errors.
I expect this is Google trying to prevent the Android market from becoming a Samsung monopsony. They're half the market, and everyone else is less than 5% (except Hauwei, which is 6%). Given the profits available, I bet half of these businesses are in danger of being shut down every year.
Another thought is that Apple has a huge advantage in that they make really low-level investments in hardware, especially the camera and security devices. Google would probably be willing to make those investments and license them to the other OEMs, but to really be good at it they'll need to be a hardware company themselves.
Lastly, and I think this is less likely, it's just my inner fanboy talking, but I hope Google makes really good phones and makes them Project Fi exclusives. If they can create an anchor phone that draws people to Google Fi, then Google has more leverage to negotiate lower prices from the wireless companies. Anything that take Verizon down a couple pegs is OK by me.
>We all know that Android handset business is barely profitable. Even Samsung makes a fraction of what Apple does, and the rest are rounding errors.
What a silly statement. Samsung's smartphone division reported profits of 3.6 Billion USD in their Q2 2017 financials. To claim that 3.6 Billion in 1 quarter is barely profitable is beyond ridiculous.
As for the second largest smartphone OEM - Huawei:
As we look at the overall revenue for Huawei during the first half of the year [2017], the company was able to bring in $42.04 billion, at an operating margin of 11%.
I don't see any financial upside to this rumor. What does Google gain from buying a struggling smartphone OEM and inheriting all of the financial burdens associated with it? In fact, this makes about as much sense as Apple buying Foxconn just so that they can own the factories that make the iPhone. You don't need to buy a smartphone factory to make smartphones in this day and age. Design your smartphone and have Foxconn, Pegatron or LG build it for you.
The more Google has been back pedaling on their unofficial motto "Don't Be Evil", the more wary I become when they start acquiring companies. I like HTC and I would like it to stay that way. I hope this merger doesn't happen.
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[ 0.23 ms ] story [ 525 ms ] threadAs other said, they are after the VR stuff, and any sale will contain that bit. They will let phones run a bit, then either sell it at a bargain to other manufacturer ( Lenovo? ) or let it slowly ( or abruptly) die.
[1] the other Motorola is doing just fine. https://www.motorolasolutions.com/
Also, note that now they have the Pixel instead of the Nexus line, which is supposedly in house designed by currently isn't.
Google need to decide what the heck their smartphone hardware strategy actually is.
I may be out of date, but I hated the last samsung phone I had because they did not realize this and subjected their users to touchwhizz.
The also need to improve at supporting their software and keeping android up to date.
Google deciding to change something is one of Samsung's biggest corporate risks since they're so dependent on them with the phone business.
There's talk of spinning off the Vive portion of HTC.
Besides, the Vive is based on Valve's tech, HTC is mainly handling manufacturing only.
Would it matter when "an Android phone" means a Samsung phone 9 times out of 10 in Western markets
When an average American comes to Best Buy to buy a phone, he does not deliberate over things as abstract to him as OS of a phone. He sees an Apple phone, a Samsung phone, and a random Chinese phone.
Let's be honest - the phone business of HTC is dead.
They don't make good products, they were just lucky and had an early start in the smartphone business.
Anyone with a Google Pixel.
For example, they put in place a firewall to ensure that Motorola wouldn't have any advantages over other Android manufacturers. I don't expect them to do that again.
That being said, major acquisitions are hard and I expect it to fail once again. But they'll mostly make different mistakes rather than the same ones they made last time.
Actually that sounds good, we could do with a third viable handset OS, but that's a digression and at this point a bit of a fantasy. They have nowhere else to go.
Back in the early days of iOS and Android the consensus seemed to be that the smartphone OSes were pretty much done. To compete with iOS all you had to do was match it's features, or catch up, and once you had it was pretty much all over. Since then Apple and Google have constantly found compelling new features for the OSes almost every year. Apple is sinking billions into the development of iOS, just look at what they're doing just in the area of health[1], and there is clear blue water in terms of quality and features[2] between it and Android, and that gap is increasing.
Google makes most of it's money in mobile off the iOS platform, yet is investing hugely in Android development and making a pittance out of it. Not only is that unsustainable, but if they really want to compete with Apple they need to dramatically increase their investment in Android. They only way they can justify doing that is to actually start making significant revenue off Android. The only way to do that is to sell their own handsets, differentiate them from competing Android handset vendors, command a decent profit margin and grab significant market share.
[1] https://www.cultofmac.com/316559/abc-news-goes-inside-apples...
[2] Super robust and secure XPC; Superior power management; Custom development tools, languages and hardware-software integration with things like Metal and the motion co-processor; High quality health and fitness tracking; VRKit; Highly consistent calibration of sensors between devices, vital for precision applications like VR; All this is arguable in the details, sure, but the fact that Apple is spending hugely on this backed by blockbuster revenues isn't and Google can't realistically match that just for the heck of it. They need a revenue stream to back it up.
So no, Google do not make tens of billions a year off Android. They may possibly make a profit off of it of a few bn a year, but that's about the best we can say. On the other hand they pay Apple $3bn a year just to be the default search engine in Mobile Safari. That's how big the gulf is in the mobile market between them and Apple. They make about 4x as much money off iOS as they do off their own operating system. If I was running Google there's no way I'd consider that acceptable, because all that iOS revenue is at Apple's discretion.
Android is too big. The oems are too invested. They need Google. Google on the other hand, could flip the switch one day and say that they do not need them anymore.
Pretty good deal IMO.
As they were doing that I remember thinking "these phones don't make much sense for Motorola in terms of generating a profit, but they make perfect sense for Google in terms of blanketing the world with Android phones."
I'd say Google was quite happy with what they were able to do while they had Motorola.
It's likely and possible that the patents were the primary purpose for the acquisition. But they put too much money & effort into the handset business to suggest that they never intended to make a go of it.
In a scale that big, "2.5 years later" counts as immediate.
That's been interesting to HTC to now. Doesn't mean they can't make a premium phone to showcase Google's tech, but just that their flagship attempts haven't moved the needle compared to the incumbents (and more than likely fair to say the Pixel hasn't either).
And, well... HTC was the contract manufacturer for the Pixel... so there's that.
TechAltar on YouTube provides a very good explanation of why Samsung (and probably other phone manufacturers) are cautious of Android[1]. This is especially true when Google acts as a hardware phone manufacturer.
The summary of the argument (from memory) is that Google provides Android to hardware phone manufacturers, and it doesn't compete with them in the hardware space. Google owning Moto (and now HTC?), makes Google a direct competitor with hardware phone manufacturers -- which you could argue are its main customers in the phone market. Google can give Moto (HTC?) unfair advantages because it owns/controls Android; even if it's not done maliciously (e.g. having access to Android source before it becomes public).
[1] https://www.youtube.com/watch?v=2_L9j6mDJBg
Only if it fails. I'm sure this is making Android phone manufacturers nervous but what are their options? Essentially, Samsung would need to revive its mobile OS platform and build a competing ecosystem. That's a huge gamble that's already failed multiple times.
It strikes me that it's more likely that they'll take the same dichotomous approach as they do with selling chips to Apple. My guess is that Google are assuming the same.
I expect this is Google trying to prevent the Android market from becoming a Samsung monopsony. They're half the market, and everyone else is less than 5% (except Hauwei, which is 6%). Given the profits available, I bet half of these businesses are in danger of being shut down every year.
Another thought is that Apple has a huge advantage in that they make really low-level investments in hardware, especially the camera and security devices. Google would probably be willing to make those investments and license them to the other OEMs, but to really be good at it they'll need to be a hardware company themselves.
Lastly, and I think this is less likely, it's just my inner fanboy talking, but I hope Google makes really good phones and makes them Project Fi exclusives. If they can create an anchor phone that draws people to Google Fi, then Google has more leverage to negotiate lower prices from the wireless companies. Anything that take Verizon down a couple pegs is OK by me.
What a silly statement. Samsung's smartphone division reported profits of 3.6 Billion USD in their Q2 2017 financials. To claim that 3.6 Billion in 1 quarter is barely profitable is beyond ridiculous.
As for the second largest smartphone OEM - Huawei:
As we look at the overall revenue for Huawei during the first half of the year [2017], the company was able to bring in $42.04 billion, at an operating margin of 11%.
https://www.xda-developers.com/huawei-releases-financial-rep...