Taiwanese news outlet, Commercial Times, revealed the news, following up on a previous story that suggested Taiwan-based HTC was interested in a sale. Despite once being one of the more popular smartphone makers in the United States, HTC has suffered from several consecutive unsuccessful smartphone launches. It recently started a separate division that sells virtual reality headsets.
While CBNC is skeptical about the news report, it does note that Google could be interested in HTC because it builds the Google Pixel and would be a good fit for company, as it continues to service to consumers with its “Pixel” smartphone brand.
In addition, Commercial Times said HTC’s poor financial position and Google’s desire to “perfect [the] integration of software, content, hardware, network, cloud [and] AI” is the driving force behind Google’s interest in an acquisition. The news outlet said Google may make a “strategic investment” or “buy HTC’s smartphone R&D team” so that the VR team would exist as its own.
“From a strategic standpoint, owning and operating its own mobile operating division would offset some of the key strategic challenges that Google’s mobile computing business might face: a) a deeper integration of hardware/software would offset some of the Android fragmentation issues that do not plague Apple iOS; b) development cycles that maximize forward mobile computing trends (Google Lens, location, ARCore, Google Assistant) with possible greater user adoption; c) an offset to rising Distribution TAC expenses and d) an offset to any negative industry dynamics (unbundling of apps) resulting from the European Commission’s Android investigation,” UBS analyst Eric J. Sheridan explained in a note.
Sheridan went on to say that the acquisition would be “immaterial to Alphabet” given the $95 billion in cash it has on hand.