Google shows its seriousness in the smartphone business by acquiring a portion of HTC assets worth USD 1.1 billion or about Rp 14.6 trillion. Can you shake the biggest mobile phone vendor today, who else if not Apple and Samsung?
Yes, once a company wants to climb in the mobile world, it is almost always associated with both names. Because as quoted from the Washington Post, they are still dominating and earned 94% profit from global smartphone business.
"Some have tried and failed to be a third player besides them, Microsoft and Nokia have released an interesting phone but failed to grab attention," said Hayley Tsukamaya, technology columnist at the Washington Post.
Google tried once also during the Motorola acquisition in 2011, which ultimately did not go according to plan. Similarly, HTC actually had the potential to climb, but now even stagger.
Google clearly has the ability to fight Apple and Samsung, but according to Hayley they are less focused in the hardware business. If only Google this time seriously by annexing HTC resources, could they in the future bothering Samsung and Apple.
Moreover they are quite successful in selling Google Home and Chromecast devices for example. And the Google Pixel phone is pretty well performing on the market, selling around 2.8 million units according to IDC. With the purchase of HTC assets and as owner of Android, Google was judged to provide experience as good as Apple.
"In order to successfully shake the grip of Apple and Samsung, Google must change the priority as a company.There are some good signs at this time, but it used to be like that," Hayley continued.
Google finally officially acquired the division of HTC phones worth USD 1.1 billion. It's like the old love blossomed back (CLBK) because Google got close to HTC when Android was first launched.
The relationship between Google and HTC started at the beginning of Android's birth. After Android acquired Google in 2005, they formed a consortium called Open Handset Alliance, precisely in November 2007.
Members of the consortium are Motorola, Samsung, and of course HTC and Google. Then HTC became the first company to release a first Android-based phone to the market.
The phone is the HTC Dream, also called T-Mobile G1, which was released on September 23, 2008. The phone comes with a physical keyboard that uses Android 1.6 Donut.
Not only that, HTC became the first Google Nexus phone maker. Although released by Google, the Nexus phone line has always been produced by other vendors, and HTC is the first vendor trusted to produce Nexus phones.
As is known, the line of Nexus phones are the phones that became the arena of Google to showcase their latest Android features. Because these phones are almost always the first phone that can taste the latest Android OS.
The first Nexus phone made by HTC was named Nexus One, released in January 2010. The phone originally used Android 2.1 Eclair, and its latest official update stuck on Android 2.3 Gingerbread.
Unfortunately after Nexus One Google and HTC relationships as stretched because Google long enough to leave HTC and switch to other vendors to produce Nexus phones. The new HTC is reconciled by Google in 2014 to produce Nexus 9 tablets released in conjunction with Motorola's Nexus 6.
After Nexus 9 to Nexus phone line 'dead' any HTC no longer get to produce Nexus phones. But HTC even gets to produce a successor named Nexus Pixel.
Although manufactured by HTC, Pixel and Pixel XL are labeled as 'made by Google' phones without mentioning the name of the Taiwanese manufacturer at all. HTC is also rumored to be making Pixel 2, which rumors circulated before the HTC acquisition decision by Google.
Now, Google has acquired HTC to strengthen their hardware division. And certainly not strange if later Google phone will beraura HTC, the article in the acquisition Google is entitled to 2,000 HTC employees or about one fifth of all employees of Taiwan vendors are.
Google just bought some of the assets of HTC worth USD 1.1 billion. Internet giant that annexed HTC division that makes Google Pixel smartphone.
Cash transactions make Google entitled to 2,000 HTC employees or about one fifth of all employees of Taiwanese vendors are. This purchase indicates Google is getting serious in the hardware business.
"Google considers it important to have their own hardware team to help them innovate on Android devices, making them competitive against the iPhone," said Mia Huang, analyst at TrendForce research firm quoted by Reuters.
Google Pixel itself, released last year, its market share is less than 1% globally. IDC's research bureau estimates Google Pixel sold about 2.8 million units.
But some analysts question Google's decision to choose HTC. Because even though once glorious, HTC now slumped with a market share below 1%.
"HTC has passed its heyday in terms of being a leader in the field of hardware design, especially since they have not done much in the latter due to declining revenue," said IDC analyst Ryan Reith.
"Unless Google really intends to control hardware for other businesses like Home devices and Chrimebooks as a smartphone companion, I do not think this gambling will work," he added.
Moreover, Google used to buy Motorola worth USD 12.5 billion in 2011. But Google impressed not seriously controlling Motorola and finally release it into the hands of Lenovo in 2014.
Some of HTC's assets have been purchased by Google for $ 1.1 billion. The 'bubble' is judged to be increasingly making HTC dangling in the world of smartphones and more focused in the virtual reality business.
Internet giant is annexed HTC division that makes Google Pixel smartphone. Cash transactions make Google entitled to 2,000 HTC employees or about one fifth of all employees of Taiwanese vendors are.
"This purchase will be a significant reduction of our overall research and development expenditure," said Peter Shen, chief executive officer of HTC's HTC Chief Financial Officer.
HTC will continue its 'remaining' smartphone business in the future. But the drastic reduction of assets due to Google's purchase makes the long-term fate of HTC phones questionable.
"HTC can indeed design and manufacture innovative products, but can not match the money of vendors like Samsung for promotion," said Jake Saunders, an analyst at ABI Research.
"Competitors like Huawei, Oppo, Xiaomi and ZTE are also further weakening them," he added.
Reports from the IDC research bureau called HTC last year's market share of just 0.9%. It dropped dramatically from its 2011 peak of 8.8%.
HTC is quite successful in virtual reality business with HTC Vive headset products. Maybe they will be more serious in this field than in smartphones.
Google steps to buy HTC smartphone division, assessed by practitioners and observers of the smartphone industry as Google's attempt to become Apple. Google seems to want to imitate Apple with its iPhone, which is a smartphone that can be controlled, both hardware and software.
By having HTC smartphone division, Google can create pure Android smartphone by combining hardware and software, in order to reduce fragmentation in the Android ecosystem.
Google now has 2,000 HTC engineers that will help control Google's Android smartphone innards. Hopefully, Google and HTC can make a good integration in terms of cameras, sensors, and chips used.
Smartphone result of concoction of both that later expected can become standard which followed by many world gadget vendor.
However, there is still one that Google does not have, the chipset engineer. Likely, there will be another acquisition deal in the future for this.
In addition to controlling hardware, Google also hopes to better control the Android software, especially the distribution of updates or updates to its OS.
Android currently has constraints, where the latest version is usually only a little circulating in the market. When the update released Google, not all Android smartphones get it, the user must wait for tuning performed by each smartphone vendor.
"Unlike the IOS, when Apple issued an upgrade, all immediately get it," said Jack Gold, an analyst at J. Gold Associates, quoted by KompasTekno from Computer World, Friday (22/09/2017).
One constraint
In addition to tidying up hardware and software fragmentation, Google still has one more constraint to compete with Apple, the distribution of smartphones.
Apple has a unique relationship with telecom operators, they can force all application testing and device certification, up to the OS update.
That way, when iOS updates are available, then the latest OS is instantly available for all devices running the OS. Users can directly download it.
In addition, mobile operators also have a role in deploying smartphone devices. Apple is known to have cooperated with various mobile operators in delivering iPhone bundling package.
While on the other hand, Google-made smartphone, the Pixel, which although classified as high-end, but available limited. Not everyone has direct access to buying Pixels, and is only sold online.
Not the first
Google's efforts in making its own Android smartphone that can compete with other smartphone manufacturers is not the first.
Before HTC, Google in 2011 and has ever acquired Motorola with a dowry of 12.5 million billion US dollars. The plan at that time, Google wants to make its own smartphone.
But in fact, three years later, Google sold Motorola to Lenovo with a value of 2.9 billion US dollars.
Tuong Nguyen, research analyst at Gartner, said: "Google recognizes that most handset makers do not get big profits from hardware, and because Google does not want to invest more in Motorola, Google just wants its intellectual property and hardware patents only.
Follow the platform
Regardless of who follows who's strategy, Google also wants its ecosystem to be adopted by many people. Google's built-in hardware-software ecosystem wants to be followed by users around the world like Apple with its iPhone and iOS.
The same thing was also done by Microsoft, when the software giant from Redmond, Washington was introduced laptop upscale, Microsoft Surface.
"Microsoft Surface is also the same as Google Pixel, not made to beat Asus or Dell," said Nguyen.
Instead, according to Nguyen, they are trying to promote the platform they created (Windows 10), as well as proving that they can create good high-end devices.
"We want you (consumers) to follow us," he added.
For this reason, Google seems to want to build their capabilities, because looking at the strategy of integrating hardware and software run by Apple was successful.
Google is now striving to be at the top of the pyramid of various hardware markets to prove to the market and its partners that this is their vision and they are ready to compete.
The truth will rumor Google soon acquisition of HTC missed already. The technology giant officially acquired some businesses from HTC that focuses on mobile and Virtual Reality (VR).
Steps taken by Google of course not without reason. Reportedly the acquisition effort became one way to realize his ambition in the mobile phone business and VR.
"This agreement represents the next brightest step in our long-term partnership, allowing Google to expand their hardware business while ensuring continued innovation in HTC phones and our VIVE virtual reality business," said Cher Wang, CEO of HTC, quoted by CNBC on Friday 22/9/2017).
Meanwhile, Google Senior Vice President of Hardware Rick Osterloh, explaining the acquisition of HTC will help Google realize the innovation of the tools Made of Google in the future.
The devices in question include the Pixel phone, Google Home, DayDream VR Headset, and Chromecast.
"That's the reason we signed an agreement with HTC, which will give more product innovation in the coming years," explained Osterloh.
To acquire HTC, Google itself must spend their money to spend USD 1.1 billion or around Rp 14.6 trillion. With costs incurred, Google is entitled to a number of HTC teams, some of whom are trusted in the development of Pixel phones made by Google. Includes a number of non-exclusive licenses belonging to HTC.
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