Google gives HTC a $1bn boost

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Google parent Alphabet has just made a $1bn deal with smartphone maker HTC.

What does it get?

It’s stealing around 2000 staff from the research and development division.

Meanwhile, HTC gets a much needed cash boost.

Why?

There’s no doubt that the R&D team at HTC is a gem, so the acquisition of talent is a big motivator.

But so too is loyalty: HTC was an early adopter of Google’s Android smartphone operating system. It’s also the maker of Google’s first fully integrated smartphone range, Pixel.

Are we going to see Google go all hardware?

Not quite.

This isn’t a buyout and if Google wanted to start making its own smartphone range in-house, it would have done so through its 2012 acquisition of Motorola. Instead, it sold the firm a couple of years later, minus Motorola’s bulging portfolio of patents, for a loss. At the same time, it angered other Android using phone manufacturers.

But Alphabet’s billion gives it more control over the design process of the Pixel, maximising the effectiveness of Android software on future devices.

Then there’s updates

Google now has a fast track highway for updating the Android OS on HTC handsets.

And that’s important.

Both Google and Apple are innovative.

But for Google, its improvements can take a while before users can benefit from them because Android works differently on phones made by its wide base of partner manufacturers. Apple users on the other hand get an update as soon as it’s ready.

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