Google’s HTC Tie-Up To Turn It Into A “Threat” To OEMs: ABI

September 21, 2017 - Written By Dominik Bosnjak

Google’s tie-up with HTC will turn the company into “a major competitive threat” to other original equipment manufacturers in the smartphone industry, according to David McQueen, Research Director at ABI Research. In his Thursday comment on the newly announced deal sent to Android Headlines, Mr. McQueen said that Google’s decision to acquire HTC’s talent which worked on the original Pixel series is a calculated move by the Alphabet-owned company and significantly less risky than its 2011 acquisition of Motorola Mobility which it offloaded to Lenovo only three years later. While the industry analyst acknowledged that Google shipped less than two million units of the Pixel and Pixel XL, he also believes that the company will be able to improve on that number in a significant manner going forward, largely thanks to the latest addition to its smartphone unit.

Even though the Mountain View, California-based company presented the 2016 Pixel series as an entirely new lineup which isn’t meant to be a spiritual successor to the Nexus device family, Mr. McQueen believes that Google is still interested in using the Pixel smartphones as a benchmark for other OEMs, i.e. show them what the Android ecosystem is capable of accomplishing under the right circumstances. The analyst also said that HTC’s decision to sell some of its talent is understandable in light of the fact that the company has been struggling to return to its former glory despite making high-quality devices in recent years, suggesting how HTC may now be looking to refocus its efforts to other industry segments like virtual reality. Nonetheless, the remnants of the company’s handset division still have a rough period ahead of them and will find it even harder to perform in the increasingly competitive global market, Mr. McQueen said.

Another reason why the tech giant may have opted against a direct acquisition of HTC’s phone unit is the fact that the firm wanted to avoid positioning itself as a clear competitor to its OEM partners, ABI Research Director speculates, noting how such a scenario is still a realistic possibility. Google is scheduled to unveil the HTC-made Pixel 2 on October 4, with the phone being set to debut alongside the Pixel XL 2 which was manufactured by LG Electronics.