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Google’s HTC move borrows from Apple’s playbook

Lucas Mearian | Sept. 22, 2017
Google's $1.1 billion acquisition of HTC’s smartphone engineering arm is a recognition that to produce a quality device you need to control over the hardware and software – just like Apple.

Google Android Garden office building
Anthony Quintano (Creative Commons BY or BY-SA)

Google's $1.1 billion acquisition of HTC's smartphone engineering arm is not a direct assault against its chief rival, Apple. But it is a recognition of Apple's successful strategy.

It is also an acknowledgement that an ecosystem dominated by hardware manufacturers and telecom providers – each with a set of priorities and plans that doesn't dovetail with Google's – results in a myriad of devices that run the gamut of quality.

With that in mind, Google's buyout of HTC's engineering IP will enable it to create a pure Android play by marrying hardware and software in a move that could eventually reduce fragmentation in the Android ecosystem.

HTC has acknowledged the deal with Google will affect about 2,000 of its own engineers, who help control the design of the of interior of a Google phone, and therefore can create better integration between cameras, sensors and processing chips from the likes of Qualcomm.

The resulting "flagship" smartphone will become a standard to which Google hopes other handset makers will aspire.

"It's the same thing Microsoft did with its Surface computer," said Frank Gillett, a principal analyst at Forrester Research. "They got impatient with the product [manufacturers] four or five years ago feeling like they didn't have strong enough flagship products to compete against the Apple Mac product line."

So, Microsoft designed its own hardware to establish what it thought would be the flagship Surface laptop and delivered the integration of hardware and software in a way only a vendor that controls both can do.

moto x4 android one
Google .The Android One Moto X4 delivers a pure Android experience.

Microsoft has tried to separate its Surface hardware team from the software team so that Windows device manufacturers still feel they have a role.

"Microsoft is not trying to take over from all the OEM partners. They do compete with their partners there, but not for the bulk of the market. That's what I expect Google to do as well," Gillett said.

What Google doesn't get from the HTC deal is chip engineers, which it will likely need to acquire in a separate deal.

Android and iOS now account for 94% of the mobile operating system market worldwide, according to Forrester Research's just-released "Mobile, Smartphone, And Tablet Forecast, 2017 To 2022." Android is the dominant platform for smartphones, capturing 73% of the market with more than 1.8 billion subscribers in 2016.


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