Why Google Is Spending $1.1 Billion to Acqhire 2,000 HTC Engineers

Dan Frommer, writing for Recode:

Why should Google cede the high end of the handset market to Apple — which dominates the industry’s profits — by default? Google can now really, truly make the best Android phone by tightly integrating hardware, software and services. And, if successful, it could eventually join Apple in profiting hundreds of dollars per device sold — not just the smaller amount it makes from search ads.

Phones are today’s focus, but what’s next matters more.

While HTC is keeping its Vive VR business, it doesn’t take much of an imagination to think of things that smartphone hardware engineers could be asked to work on.

What comes after the smartphone? Augmented reality (AR) or “mixed reality” glasses? AirPods-like earpieces? Wearable sensors? Implanted devices? All of the above? It’s increasingly clear that Google’s parent company Alphabet won’t be leaving this problem up to its Nest subsidiary to solve. Google must play a leading role in the next wave, or it will lose relevance.

In the near-term, the challenge for Google isn’t making great phones. They proved they could do that with last year’s Pixel models. The challenge for them is bringing them to the masses. I don’t know anyone who owns a Google Pixel who isn’t involved in the tech industry in some way, either as a developer or in the media. No one. The Pixels are Android’s best answer to the iPhone, and no one knows about them.

Google can build all the great new hardware they want, but they’re not going to succeed until they learn to do product marketing.

★ Thursday, 21 September 2017