Google reportedly looking at buying HTC’s phone unit, expands Android One program

HTC is the maker of Google’s successful Pixel smartphones. However, the Taiwanese company has been under intensifying financial pressure for a number of years, falling behind Samsung and other handset makers for Android market share.

In August, HTC started to explore a sale of some or all of the business, according to Bloomberg. Today, DigiTimes is reporting that Google may invest in HTC or buy its handset business outright:

HTC reportedly has entered the final stage of negotiation with Google for selling its smartphone business unit to the Internet service operator, according [to] a Chinese-language Commercial Times report.

Google is currently considering options of either becoming a strategic partner or buying out HTC’s smartphone business, said the report, which added that the possible deal will not involve HTC’s Vive VR business or the entire company.

This is especially interesting given that Google previously owned and then sold the Motorola handset business. The company initially liked the idea of Apple-like integration between hardware and software for Android and felt it could better accomplish this by owning a handset maker.

Later, Google decided that wasn’t necessary, or the business was too removed from Google’s core operations, and it sold the company for about $3 billion to Lenovo in 2014. Motorola also underperformed, and investors didn’t like that Google owned a hardware business that competed with its Android partners.

That’s why its curious that Google is reportedly flirting with the idea of buying HTC’s phone business. But given that HTC is a maker of premium Android handsets and that it’s the source of Google’s Pixel, the company may feel compelled to either prop up HTC or buy the unit outright.

Buying the phone division would signal Google’s lack of confidence in HTC management and a statement that an investment might be wasted. But it would also put Google back in a potentially problematic spot with investors and other Android OEMs.

In a related bit of Android hardware news, Google announced earlier this week that it was expanding its Android One program, designed to provide the “pure Android experience” (sans carrier and OEM software) to customers at affordable prices. The program was originally aimed at selected developing markets such as India but is popular and expanding.

About The Author

Greg Sterling

Greg Sterling is a Contributing Editor at Search Engine Land. He writes a personal blog, Screenwerk, about connecting the dots between digital media and real-world consumer behavior. He is also VP of Strategy and Insights for the Local Search Association. Follow him on Twitter or find him at Google+.