Is HTC on an inevitable path towards acquisition? And how might a Google buyout in 2017 look different to the Motorola deal of 2012?
So, Google might buy HTC’s smartphone business — or at least make a sizeable investment in the struggling phone maker. This story from the Taiwanese press, which broke on Thursday, has understandably invited rampant speculation around the future of what was once one of the biggest names in mobile.
Chinese-language publication Commercial Times says HTC is in the “final stage of negotiation with Google for selling its smartphone business unit.” The deal may involve a straight buyout of HTC’s smartphone biz, or Google becoming a “strategic partner” for HTC. However, it’s unclear what that might involve, given the close partnership that already exists between the two around Android, Pixel and other projects — a strategic investment in the company is one likely possibility. The deal will be concluded by the end of the year at the latest, the report claims.
Let’s gloss over the more vague possibility of a “strategic partnership” for the moment, and concentrate on what might actually happen if Google parent company Alphabet (with its almost $95 billion of cash on hand) snapped up the smartphone arm of HTC, a company with a market cap of just $1.86 billion. Even considering the diminished status of HTC today when compared to its glory days, it’d be a huge development in the mobile business. (It’s worth noting that Vive, which is a separate business unit, wouldn’t be included in any potential deal.)
But haven’t we been here before, with Motorola becoming “a Google company” back in 2012? Google’s last phone maker acquisition has been brought up again and again in news articles and thinkpieces over the past couple of days, the suggestion being that Google would never buy another smartphone manufacturer after it ended up selling on Moto to Lenovo — at a loss — just a couple of years later.
There’s potential for a much deeper dive into both deals, but let’s keep things simple for the purposes of this column. The bottom line is that Google basically bought Motorola for the many valuable patents it owned. If it hadn’t have opened its wallet back in 2012, those critical patents could’ve been used to pummel cash out of other Android manufacturers — backed up by the very real threat of import bans or other legal chicanery.
Through the Motorola deal in 2012, Google became a smartphone vendor by accident.
We’re now half a decade removed from the smartphone “patent wars,” back when Apple actually succeeded in having some Samsung phones blocked from sale in the United States. But if a hostile party — like the lawsuit-happy Rockstar Consortium, made up of big names with an interest in Android’s downfall — had gotten hold of Motorola’s patents, it could’ve slowly but surely drained the life out of Google’s mobile platform.
Google didn’t buy Moto in 2012 – Source