Media Contact

Ms. Lindsay Hou

Tel: +886-2-8978-6488 ext.667

RSS Subscription
  NAND Flash  
  Consumer Electronics  
  Green Energy  
  Internet of Things  
  Automotive Electronics  
  Innovative Technological Applications  

Press Release

[Media Alert] Transfer of Smartphone Assets and Expertise from HTC to Google Fits Into Both Companies Long-Term Strategies, Says TrendForce

Thursday , 09 / 21 / 2017 [ Analysts: TrendForce ]

HTC announced on September 21 that the company’s R&D and engineering unit that is responsible for Google’s Pixel smartphones will be officially joining Google. This deal to acquire of HTC’s talents and assets related to smartphone manufacturing is worth a total of US$1.1 billion.

Below is a brief analysis of this deal by TrendForce and a table showing this year’s quarterly production volumes of Google and HTC branded smartphones. Hopefully, our research will be useful to you as a reference should you decide to report on this event. 

TrendForce’s take on the transfer of assets and expertise from HTC to Google:

The latest deal complements the respective strategies of Google and HTC. For Google, the technologies and know-hows from HTC will expand its development capacity for mobile hardware. In the past, Google mainly worked with major smartphone makers to build and market Android devices. Google provided its software expertise, while its partner brands focused on developing the hardware. Both sides worked to their strengths, and the resulting products were the integrations of their solutions. However, technologies and design trends in the smartphone market are changing very rapidly. Google has found it necessary to assemble its own hardware team and become more proactive in the smartphone market in the recent years. 

Besides raising Android’s efficiency so it stays competitive with Apple’s iOS, Google has other future plans for Android as a mobile ecosystem platform. The company wants to take advantage of the opportunities from the fields of augmented reality (AR), virtual reality (VR) and artificial intelligence (AI). As voiced-based virtual assistants on mobile devices become more mature, Google also sees smartphones as the main medium that supports the development of AI-based solutions for smart homes and self-driving cars. Thus, Google desires to improve its hardware know-how to the level that it has for software.

The first generation of Pixel devices, which Google and HTC jointly developed, has a cumulative total production volume of nearly 2.4 million units since their market release. HTC and LG are the ODMs for the second-generation Pixel devices that will be revealed on October 4. The total production volume target for the second-generation Pixel devices is set at 3 million units.

As a smartphone vendor, HTC since last year has shifted away from offering numerous models to drive shipments. Instead, the company is now focusing on the high-end to mid-range market. This year, HTC has fewer devices on the market, but these products have higher margins. Still, the overall sales of HTC smartphones are fairly depressed. From the start of 2017 to the end of the year’s third quarter, HTC’s smartphone production volume is estimated to total around 3.5 million units, representing a sharp year-on-year decline of 64%.

The agreement with Google is not expected to have a noticeable positive effect on the production volume of HTC branded smartphones in the fourth quarter. TrendForce estimates that the total production volume of HTC branded smartphones for the entire 2017 will come to around 4 million units.

Nonetheless, the agreement is still a win-win for both parties. In the immediate term, HTC, which is known for its R&D capability, can address the need for smartphone expertise on the Google’s end. Google will obtain the valuable patents, and HTC in return gets a large injection of funding that could help turn the company’s financial situation around. HTC has already reported losses for nine consecutive quarters.

From the long-term perspective, HTC with the money from Google will concentrate on developing its VR business. There is a strong possibility that HTC will also form a closer ties with Google in the development of AR/VR applications. As for HTC’s smartphone business, it has given up a significant amount of resources for future product development. Around 70% of technological assets and R&D capability related to smartphones has been transferred to Google. This deal therefore suggests that HTC will eventually withdraw from the smartphone market on account of years of weak performances. Other than a flagship device carrying Qualcomm’s Snapdragon 845 SoC, HTC right now does not appear to have other smartphones line up as next year’s offerings. TrendForce’s latest forecast puts the total production volume of HTC branded smartphones for 2018 around just 1 million units.

To keep updated with our press releases, please follow our social media pages. facebookGoogle+TwitterLinkin

Android smartphone market Smartphone Google HTC

TrendForce Press Center Copyright Notice
TrendForce grants you a limited license to use and/or republish any of the press releases on TrendForce Press Center for any legitimate media purpose (including copying and redistributing the content of press releases in any format and via any outlets), provided that you follow these license terms:

1. Reference TrendForce as the source on your works, or include a hyperlink to the original release on the TrendForce site.
2. Do not modify any press release wording, or maliciously alter its related information. Users are subject to any civil or criminal liabilities if the information displayed in the copy or redistribution of press releases is inconsistent with the original materials on TrendForce Press Center.
3. Do not modify or add hyperlinks, including but not limited to adlinks, within the press release. The authorization of press releases on TrendForce Press Center does not grant users the right to suggest, approve or endorse their value-added derivatives on behalf of this body.

If your citations of press releases contain mistakes and/or have information missing, TrendForce may, in its sole discretion, direct you to remove the content distributed via TrendForce from your site at any time and for any reason, and you agree to comply with such request.