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Slashdot Asks: Why Does Google Want To Purchase HTC? (bloomberg.com)

Posted by msmash on from the big-fish-small-fish dept.

Rumor has it Google is planning to purchase HTC -- or at least a portion of it. The speculation of this has been doing rounds for weeks now, and it reached a new high today after HTC said its stock will stop trading from Thursday, as it prepares to make a "major announcement" tomorrow. Bloomberg reported today: Alphabet's Google is close to acquiring assets from Taiwan's HTC, according to a person familiar with the situation, in a bid to bolster the internet giant's nascent hardware business. HTC, once ranked among the world's top smartphone makers, is holding a town hall meeting Thursday, according to tech website Venture Beat, which cited a copy of an internal invitation. The shares will also be suspended from trading as of Sept. 21 due to a pending announcement, according to the Taiwan stock exchange. Of course Google has made similar moves in the past. It previously owned Motorola for a brief period of time, but that acquisition didn't materialize much. The company has however, since re-hired the Motorola chief it once had, Rick Osterloh, and founded a separate hardware team under his stewardship. Claude Zellweger, the one-time chief designer of HTC Vive, is also now at Google, working on that company's Daydream virtual reality system.

What reasons could Google have to purchase HTC? Share your thoughts in the comments section below.

59 of 101 comments (clear)

  1. becau$e it can by turkeydance · · Score: 1

    peanuts

    1. Re:becau$e it can by ElizabethGreene · · Score: 5, Insightful

      You misspelled patents.

    2. Re:becau$e it can by Bearhouse · · Score: 4, Insightful

      Plus it gets the IP & knowledge base built on the patents, and the people that did it.
      HTC used to make pretty decent devices, and I'm sure there's still some guys here who remember how its done.
      It's sometimes much faster and cheaper to buy a team of talented designers and engineers, PMs etc. rather than build from scratch.

    3. Re:becau$e it can by ElizabethGreene · · Score: 1

      They also get all of HTC's licensed agreements too. IIRC HTC had licensing deals for IP with Nokia, Microsoft, and Apple.

    4. Re:becau$e it can by Shaix · · Score: 1

      Used to? It still does... I got a HTC U11 dual sim 6GB ram 128GB storage latest qualcomm processor day it came out, and it's a beautiful awesome phone... with one of the best cameras...

    5. Re:becau$e it can by 93+Escort+Wagon · · Score: 1

      People gave the "people and factories" argument when Google purchased Motorola... but it turned out to simply be about acquiring patents, and discarding the rest. I imagine it'll be the same with HTC, if it actually happens.

      --
      #DeleteChrome
    6. Re:becau$e it can by halofan_sd · · Score: 1

      also HTC is willing to sell, it needs the money, Google wouldn't have to pay much of a premium

    7. Re:becau$e it can by arglebargle_xiv · · Score: 3, Informative

      They also get all of HTC's licensed agreements too. IIRC HTC had licensing deals for IP with Nokia, Microsoft, and Apple.

      I doubt that's the case, unless they had some really odd licensing agreements. Licenses are (almost) always written to be non-transferrable for exactly this reason, so $bigcompany can't acquire them through the back door by buying $smallcompany.

    8. Re:becau$e it can by ElizabethGreene · · Score: 1

      I've commented, and can't +1 informative. In lieu of that, please accept "Thank you; I didn't know that."

    9. Re: becau$e it can by KGIII · · Score: 1

      I'm not sure what major patents they held? They may have some in the VR space, but they base their software off another company - Vive, maybe? I forget which one.

      I don't know of ant HTC patents that are significant in the mobile space. They have some design patents, but I can't think of anything major.

      --
      "So long and thanks for all the fish."
    10. Re:becau$e it can by Trogre · · Score: 1

      Can anyone else back this up? I very much want it to be true.

      --
      "Nine times out of ten, starting a fire is not the best way to solve the problem." - my wife
  2. Wild guess by Anonymous Coward · · Score: 1

    ... to make money with the acquired intellectual property and human capital.

    I know, crazy talk. Sorry to have bothered you.

  3. What's different this time by alvinrod · · Score: 2

    I think the better question is what's different about this time. They already tried buying a device maker once with Motorola (although to be fair Motorola was trying to put a gun to Google's head with patent threats) and while they produced some interesting devices, none of them caught on in the market and they ended up unloading the company a few years later to Lenovo.

    I'm curious what their plan is this time around, or they're just buying another slumping handset manufacturer to prop them up for a few years until they realize that they aren't making any money and end up selling the company to a Chinese manufacturer interested in buying the brand.

    1. Re:What's different this time by Solandri · · Score: 2

      I think the better question is what's different about this time. They already tried buying a device maker once with Motorola Mobility

      When Google acquired Motorola, they were still in their Nexus phone phase. They were working with a different manufacturer every generation to produce a "pure" low-cost Android phone as a demonstration of what the platform was capable of. The hope being that this would encourage other manufacturers to step up their game and produce better hardware. They switched manufacturers each gen so they wouldn't be accused of favoritism, since that could cause some manufacturers to stop producing Android devices entirely. They couldn't use Motorola to produce Android phones for the same reason - companies don't like being in direct competition with the company producing the software their products run. Microsoft is being extremely careful with Surface for the same reason - limiting it to a niche product (convertible tablet/laptop).

      This time around, Nexus is dead. The Google Pixel line of phones is premium priced, so represents less of a threat to other Android phone manufacturers. HTC has been sued almost into bankruptcy by other companies, so could be purchased very cheaply. Samsung is hinting that it wants to abandon Android for their own OS, but also supplies many of the parts which go into producing the Pixel phones so won't be as "offended" by Google manufacturing their own phones. So I'm guessing Google/Alphabet figures if they're careful and keep their phones a (relatively) niche product, it won't upset other manufacturers into quitting the Android space, while still giving them some control in guiding the direction of Android hardware should Samsung abandon it.

    2. Re:What's different this time by Kjella · · Score: 1

      Probably just buying the technology to produce newer Nexus phones and keep their partners on their toes. What Google doesn't really want is anyone else doing AOSP-based spins without Google services, their counter-threat is to go down the Apple road and make first party phones, go proprietary or otherwise make the open code less usable. Of course that would piss off many partners and others so Google doesn't want to do that, but having the threat is a good way to maintain status quo. Same way nVidia has "founders edition", Microsoft has the Surface line etc. even if they're not the mass volume they're an implicit threat that yeah, we could.

      --
      Live today, because you never know what tomorrow brings
    3. Re:What's different this time by SB5407 · · Score: 1

      I'm glad to see that others are wondering the same thing, because I think "Why are they doing it again?" is the real question.

      They probably bought Motorola for Moto's patents and expertise in the phone hardware business and to get a toehold in the phone hardware market. Later, some egghead in manglement thought that they they should sell it off, but that was a mistake. Now, Google's probably at it again because they still want--perhaps even need--to get the patents, the expertise, and the toehold in order to survive in the mobile device market on their terms.

    4. Re:What's different this time by guacamole · · Score: 1

      So I'm guessing Google/Alphabet figures if they're careful and keep their phones a (relatively) niche product, it won't upset other manufacturers into quitting the Android space, while still giving them some control in guiding the direction of Android hardware should Samsung abandon it.

      Which doesn't explain why exactly Google needs to own a device manufacturer. The same formula would have worked for Google when it was contracting others to build Nexus or Pixel devices. Nice, but not so nice, in order not to offend the likes of Samsung.

      Moreover, these days there are plenty of Chinese manufacturers that produce cheap phones with great specs. Huawei for example. These companies would love to produce either low end, mid-end, or high-end hardware for Google's brand. Why Google needs to own a second-grade device manufacturer is still beyond our knowledge.

    5. Re:What's different this time by Rob+Y. · · Score: 1

      Samsung is doing just fine. Everybody else - except HTC and LG - has pretty much given up on high-priced flagships and are duking it out in the midrange to see who gets to be the high-end of the midrange tier.

      That leaves Google's Pixels competing with HTC and LG - while using them to produce their devices. That can't work - and it shows. The Pixels are nice devices, but they're still compromised by being based on existing HTC and/or LG designs. The first gen Pixels were at least both from HTC - and so had a family resemblance that the prior gen of Nexus devicess did not. But they still had those crazy-big bezels - presumably as a holdover from being based on the HTC 10. And with the Pixel 2's they're back to having a small HTC version and a big LG one. They had to buy one of those guys. And the other one's not gonna like it - but the rest of the Android field shouldn't mind too much.

      --
      Posted from my Android phone. Oh, I can change this? There, that's better...
    6. Re: What's different this time by KGIII · · Score: 2

      It is called Tizen and, by most accounts, is horrible. They made a claim of using it exclusively in the future. Said claim was in 2016. It appears to not have reached fruition, I'm not sure what their timeline is now.

      --
      "So long and thanks for all the fish."
    7. Re:What's different this time by i.r.id10t · · Score: 1

      effective way to get the design and engineering staff, maybe some land or a building, etc and then sell off or close down what they don't plan on needing/using, maybe even as a "loss" for tax purposes, etc.

      --
      Don't blame me, I voted for Kodos
  4. HTC can make phones for Google! by Anonymous Coward · · Score: 1

    The Motorola acquisition was more about Google getting their hands on patents to protect themselves from litigation from patent trolls and other competing in the mobile space.

    With the HTC purchase, Google (or Alphabet or XXVI or whatever Google is calling itself these days) is likely interested less in their patent portfolio but more interested in the existing infrastructure that HTC has so that Google can manufacture Android devices without having to rely on partners. Manufacturing channels and talented personnel are likely the motivating factors for Google to purchase HTC.

    1. Re:HTC can make phones for Google! by mangastudent · · Score: 2

      And HTC is the manufacturer of their current flagship phones, the Pixel and Pixel XL.

    2. Re:HTC can make phones for Google! by guacamole · · Score: 1

      With the HTC purchase, Google (or Alphabet or XXVI or whatever Google is calling itself these days) is likely interested less in their patent portfolio but more interested in the existing infrastructure that HTC has so that Google can manufacture Android devices without having to rely on partners.

      I would like to believe this theory, but at the same time it's not like the third-party manufacturers have been preventing Google from becoming a major or at least a significant hardware brand. While the devices introduced under the Nexus brand certainly had lots of fans, it seems like Google did its finest to keep this brand underground, underpowered, or overpriced and undesirable.

    3. Re:HTC can make phones for Google! by RhettLivingston · · Score: 1

      I think this simple answer truly is exactly it. And the price being thrown around of a few hundred million is pocket change for Google.

      The Pixel and Pixel XL were rated better than any other phone on the market including the iPhone they faced at introduction by many reviewers, but they didn't get the sales that rating deserved. Why? Simply because they couldn't make enough of them. I waited 6 weeks for my Pixel XL.

      With the manufacturing in their hands, they should have more flexibility in using their cash and clout to expand production, compete for the limited supply of next-generation displays, etc.

      The timing is a bit concerning. It makes you wonder if Google saw Pixel 2 production, which should be underway or getting underway by now, falling behind schedule like the Pixel did and had to take over.

  5. My guess by Anonymous Coward · · Score: 5, Interesting

    In 2011, VIA technologies sold its graphics subsidary "S3" to HTC, my guess is the are actually interrested in the Graphics Patents and knowledge from S3.

    1. Re:My guess by BLToday · · Score: 1

      Hahaha. Buy it for the S3 graphics decelerator? I remember the S3 ViRGE 3D, it was terrible. Plus, I think any graphic patent will be expired by now like S3TC (texture compression).

    2. Re:My guess by drinkypoo · · Score: 1

      my guess is the are actually interrested in the Graphics Patents and knowledge from S3.

      Why, so they can build GPUs like it's 1999? I'm exaggerating, but S3 is way way way behind the curve there, what could they possibly have that would be worth buying all of HTC?

      --
      "You're right," Fisheye says. "I should have set it on 'whip' or 'chop.'"
    3. Re:My guess by supremebob · · Score: 1

      Yeah, I think that they're buying HTC for the same reason they bought Motorola Mobility and then quickly dumped it to Lenovo. They just want a bunch of new patents (cellular, VR, graphics) to protect themselves from Apple/Amazon/IBM/Intel/Microsoft.

      Tech companies are quickly becoming like the phone and cable companies of yore. They're setting up huge barriers of entry, insuring that only a handful of businesses will ever have a chance to become competitive at a nationwide or global scale.

    4. Re:My guess by guacamole · · Score: 1

      Google wants to own 10+ old graphics technology (some noting S3 name, would say 20 years old)? Mmmokay.

    5. Re:My guess by Osgeld · · Score: 1

      I grabbed an old pentium2 the other day, it has a 1999 S3 virge blah blah blah direct X blah blah 3d accelerator .... it cant run games from 1999 at more than 5fps, so they were way way way behind the curve then (cause even my half the speed pentium mmx with a voodoo 2 can run the same shit at 24-30fps)

  6. As of posting this there are two others by H3lldr0p · · Score: 3, Interesting

    which state the obvious. 1) That HTC is a competitor in the same phone space and that 2) Google has money to burn.

    There's a third reason.

    Google doesn't know how to innovate anymore. They've gone as far as they can with computers as they are and don't want to sink time and money into finding the next new thing. Instead they're going through a retrenching so that profitability remains relatively high while seeking as many monopoly positions as they can. They already have search and internet advertisement sewn up. The US doesn't have the will to establish a new regulatory regime and the EU doesn't currently have the reach to force the US into following their course. That may change by the time President Stupid is done but that's for the future to decide.

    In the meantime, the smart move is for Google to gobble up as much as it can under their Alphabet umbrella and see which keeps bringing in the money.

    1. Re:As of posting this there are two others by guacamole · · Score: 1

      Google doesn't know how to innovate anymore

      And who exactly can innovate these days? Look at Apple. First, it was beaten by the Android phones to the idea that the smartphone has to be big, like 5 inches in diagonal.

      Next, let's admit that Apple has been building and selling the same smartphone, from iPhone 6 through 7, for 3 years. The iPhone 6s was the 6 with 1GB more of RAM, and the 7 bumped up the CPU and then deleted the headphone plug (huge mistake, IMHO). And, frankly the iPhone 8 looks exactly the same and works exactly the same. They basically sold the same device for 3 years, and promise to sell it for fourth year, except they bump up the internal specs more and more. Where is the innovation?

      Finally, Apple's iOS and Android have been ripping features off each other, and they look exactly the same. My Android and Apple phones from four years ago have pretty much similar GUIs as the Apple and Android phones right now. I could go back to my LG G2 from four years ago and not miss anything (except some apps that now refuse to support Android 5).

  7. Mo ... by CaptainDork · · Score: 1

    ... ney.

    --
    It little behooves the best of us to comment on the rest of us.
  8. Question by Artem+S.+Tashkinov · · Score: 1

    I've got just one question: why is this news at all? Even it's true, does it change anything in regard to Android? Hardly so. Also, considering Motorola I'd really doubt they are keen to step into the same river twice. HTC's patents are perhaps the only thing they are after but I'm still doubtful.

    1. Re: Question by KGIII · · Score: 1

      One of my favorite Buddhist sayings:

      No two people can walk through the same stream.

      You may wish to reflect on that. They may be similar events, but they aren't the same.

      --
      "So long and thanks for all the fish."
  9. Obvious... by Oswald+McWeany · · Score: 1

    It's obvious. They obviously believe the letters HTC belong in the Alphabet.

    --
    "That's the way to do it" - Punch
  10. trying to achieve megacorp status by Khashishi · · Score: 1

    The goal is that you will wear your Google clothes in your Google smart home while you eat your Google hamburger while you watch the Google news on your Google telescreen.

    1. Re:trying to achieve megacorp status by Anonymous Coward · · Score: 1

      They are already there methinks. I don't like how "powerful" Google have become. As a longtime IT security nerd, I am somewhat worried over the alarming control Google exert. Search, phones, IoT, cars, medical, you name it. I miss the early days of the WWW when there were competing search engines and things were far more organic than they are now. I dislike how everyone thinks that somehow everything must be monetized. Google has their trackers on the majority of websites and their tentacles in school systems, corporations. I avoid them and their properties as best I am able.

  11. I've looked into it, and I think I have it figured by Kenja · · Score: 3, Funny

    Google, well Alphabet really, wants money. It turns out, that if you make and sell things, you can get money!

    --

    "Have you ever thought about just turning off the TV, sitting down with your kids, and hitting them?"
  12. Might be a VR purchase by chewie2010 · · Score: 2

    Might be a VR purchase. Just sayin. Google invested heavily into Magic Leap and it has been vapor. The google dream headset thing has registered a big fat zero. In all honesty Google needs to exit the hardware business, they suck at it. Google voice thing looks like an air freshener and no one wants it.

    1. Re:Might be a VR purchase by Anonymous Coward · · Score: 1

      Supposedly, HTC are keeping the VR department and selling the rest.

      But it would be kind of silly, anyway, since HTC basically just took Valve technology and productized it. I can't see that Google would want to be selling headsets for Valve.

  13. competing: how so ? by DrYak · · Score: 2

    "Competing phone" doesn't make much sense.

    Compared to the rest Google doesn't make much by selling phone. They are not harmed by the existence of manufacturer competing with Google's Nexus line.

    They make maybe a little bit more by selling Android licenses to manufacturer who choose to have the complete "Google Experience" (including Google Play Store and other such Google apps and service) instead of the free AOSP. In that case, the more manufacturer producing Android phone, the better for Google, no matter which brand.

    They make quite some significant money by taking a fee on all transaction to happen on the Play Store. Again, no real threat by "competitors". On the contrary : the more manufacturer making Android phone, the more potential customers who are going to spend to the Play Store.

    Finally the biggest chunk of money, they make through ads. They don't even need android phones for that. Even Apple iOS users are potential eyeballs that they can sell to advertisers. They just need to have as many people going online so they can be exposed to ads, no matter *which smartphone* they use to do it.
    (That's why Google is both *developing* their own Chrome browser AND *financially supporting* Mozilla's effort on Firefox. Firefox isn't a *competitor*, it isn't a product that is "diverting revenue" from Chrome - that would be difficult given that Chrome is free. They are both parallel mean to achieve what Google actually needs : people getting online on the net where Google can profit of them because they are the biggest advertiser).

    None of the above will cause Google to see HTC as "competition" that they need to buy.

    --
    "Sufficiently advanced satire is indistinguishable from reality." - [Tips: 1DrYakQDKCQ6y52z6QbnkxHXAocMZJE61o ]
  14. HTC One MAX by hduff · · Score: 1

    If they bring back the HTC One MAX, I'm all in favor of this. I loved that phone, just the right size for me.

    --
    "I believe in Karma. That means I can do bad things to people all day long and I assume they deserve it." : Dogbert
  15. Re:HTC Vive Focus by markhb · · Score: 1

    It's a shame if the marketing/mindshare makes the cellphone part of the company worthless, because the HTC Ten I carry is a pretty damn nice phone. It's actually the third of theirs I've bought in a row.

    --
    Save Maine's economy: write stuff down. All comments are exclusively my own, not my employer.
  16. 2 reasons by bravecanadian · · Score: 1

    1) Patents

    2) A notch in the belt for the executives responsible for the decision

  17. Could be a three letter agency wants it by xtronics · · Score: 1

    They can give money for firms that they want a US firm to buy.

  18. Bored by Hognoxious · · Score: 1

    They're bored with making an utter fucking mess of software. They want to do it with hardware now.

    Though they'll probably say "synergy" or some such twaddle.

    --
    Confucius say, "Find worm in apple - bad. Find half a worm - worse."
  19. No H in their Alphabet by HermMunster · · Score: 1

    Well, just kidding, but maybe it is for the very same reason they bought and sold Motorola. They wanted the patents. I doubt Google has a need for more manufacturing capacity, that is, unless they have a plan for far greater production or of production of new products.

    --
    You can lead a man with reason but you can't make him think.
  20. RE: What have they innovated in the past? by SB5407 · · Score: 2

    They have innovated the following:

    • Google Search
    • AdWords
    • AdSense
    • GMail
    • Maps and Directions
  21. Leverage against handset makers by williamyf · · Score: 2

    The relationship between Handset makers and Google is a very tense one, to say the least.

    That's why things like TouchWiz (Samsung), EMUI (Huawei), LGUX (LG) and other "Non-Stock android" UI still exist. Yes, those were necesities when Android's UI was primitive, and not to the liking of certain markets (Like South-East Asia, for instance).

    If one of the big guys breaks up with google and slaps their UI on top of AOSP, or Bada, or BB10, the users would be none the wiser. Especialy in markets like India or Chine, were the dominant services are NOT Google's.

    At the same time, google tries to move forward the ecosystem, both in terms of hardware capabilities (AR is the latest example), and in therms of Software updates... Sometimes, they try the carrot, sometimes the stick. After google got the Motorola patents, they used motorola for a while as one of the Sticks. Now, they need another stick... Enter HCT.

    Alphabet will slurp any patents and interesting tech that HTC may have.

    The phone division will make a couple of interesting handsets (the reference designs will still be awarded in a kinda-sorta-of-round-robin-fashion to partners like LG, Samsun, Lenovo, HTC itself, etc.), with very-close-to-stock-Android, and decent update cycles too. And after a few years, will be sold to some emerging handset maker in China or India, which is in the Top 10 global handset maker chart, but only by virtue of the sales in their home market, which needs a globaly recognized brand to help their internationalization (TCL owning the Alcatel, BlackBerry and Palm brands is a good example).

    Then, after a few years, when Google needs another stick, they will buy yet another formerly great handset maker with a recognizable brand, and repeat the cycle...

    --
    *** Suerte a todos y Feliz dia!
    1. Re:Leverage against handset makers by williamyf · · Score: 1

      Not really.

      There are behemoths in that space Like Samsung, Huawei, Ericsson and Nokia (the telco Equipment maker formerly known as Nokia-Siemens-Motorola[Telco]-Alcatel-Lucent) that can not be arsed to sell their patents.

      Also, many of the patents that came from Motorola, or could come from HTC are for 2G and 3G tech. But those will stop being relevant by 2020 or 2025 when those networks are shut down in favour of 4G and 5G Frequency refarming...

      Yes, very likely HTC has some interesting patents in Cellphones (2/3/4G and SW), and some other areas (perhaps VR), but not enough to be "Vastly Dominant".

      --
      *** Suerte a todos y Feliz dia!
  22. Nothing to fear here. by McFortner · · Score: 1

    We want to buy up everything in the world because it's... it's... it's GOOD for you! Yeah, that's it, that's the ticket. Totally not because we want to rule the world or anything....

    --
    Beware of Sales Reps bearing gifts.
  23. 400 billion $ says ... by Qbertino · · Score: 1

    "Why not?"

    --
    We suffer more in our imagination than in reality. - Seneca
  24. Recall the Oracle's Sun Microsystems takeover? by guacamole · · Score: 1

    Everyone is scrambling to explain how this is such a great a business idea for Google, just like some people were trying to explain how great it was that Oracle took over Sun Microsystems. I think we're observing a very similar situation. We all have observed what Oracle has turned Sun Microsystems into, pretty much a ghost. I think the same will happen with HTC.

    Google has no coherent plan for what to do with HTC. Probably some kind of a young MBA made a great a case for the management that they need to own a hardware business. The rest we'll see soon. It won't be pretty or interesting.

  25. because by nnet · · Score: 1

    Bacon.

  26. This much I have learned by H3lldr0p · · Score: 1

    You have to want to solve problems in order to innovate. You have to have competitive pressure in order to force innovation to happen. Right now, I don't see an environment in the US where the powers that be want problems to be resolved or are willing to break companies apart to force innovation to happen. Now, individuals feel otherwise. Income distribution seems to be a popular place to start. Or for there to be unlimited internet everywhere is another good one. Or better, cheaper healthcare.

    But none of these are addressable through technology. Apple, Google, or Amazon aren't who we should be looking to for that. The problems those companies are good at solving have been solved by them.

  27. Re: What have they innovated in the past? by Baleet · · Score: 1

    I used to feel the same way about advertising, but then I got to thinking that the reason I can use the Google ecosystem to save myself time and effort at numerous tasks is because of the advertising the tech they use to gather metrics for it. So, I am cool with it now.

  28. A couple articles by John.Banister · · Score: 1

    What's the deal with Google and HTC? and From the Editor's Desk: HTC x Google These seem to be well thought out and in more depth than many. It sounds like Google and HTC complement one another pretty well in what it takes to succeed in the smartphone business, and it also sounds like Google is getting excellent manufacturing at a very good price. I wonder how long before they also have a product that competes well with MS Surface?

  29. Re: What have they innovated in the past? by KGIII · · Score: 1

    Innovate doesn't mean invent. Even the iPhone was innovation, though it was not the first smart phone. Even the new iPhone is innovation, even though it's not entirely new.

    Words have meanings. Dictionaries are available online and for free. Please consider using one.

    --
    "So long and thanks for all the fish."