Industry News

HTC Did Not Fall, But Smiled Very Happy



Google's acquisition of HTC mobile phone business news confirmed by both sides. HTC (HTC International Electronics Co., Ltd.) yesterday announced an agreement with Google, part of the business and 2,000 employees to 1.1 billion US dollars sold to Google.

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Under the agreement, Google recruited the HTC members who were involved in creating Google Pixel phones to join Google. At present, HTC mainly smart phones, virtual reality, health care, foundry R & D team four business units. After the signing of the agreement, foundry R & D team of nearly 2,000 employees will be the whole process to the Google staff.


In addition, HTC will also grant its patent non-exclusive use of Google. In order to get these patents HTC and nearly 2,000 employees, Google took out a total of 1.1 billion in real money. As an Internet company, Google said that in the future will be involved in the hardware field, in the next few years to stimulate more product innovation, to create a Pixel smart phone product line.


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Sell the team and the right to use the patent, HTC money for help


HTC believes that the transaction will strengthen the HTC own brand smart phone business, continuous implementation of streamlined product portfolio strategy, will further enhance the HTC operating efficiency and financial flexibility, "HTC own intellectual property portfolio and world-class talent composition unparalleled The value chain ", HTC will continue to increase the Internet of Things, artificial intelligence and other investment.


For Google, the deal will strengthen its hardware strategy, and HTC to maintain cooperation to promote the sustainable development of Pixel, "through software, hardware and services to create the best Google product experience."


Pixel is Google and HTC co-production of the company's first end-to-end mobile phone.


HTC in August this year, released 2017 Q2 Q2 earnings, a loss of 1.95 billion Taiwan dollars (about 430 million yuan), which is HTC for the ninth consecutive quarter of the loss. Some commentators believe that the current market and shipping trends, its Q3 earnings will continue to lose or even likely to increase.


In this situation, HTC seeking to sell part of the business to reduce the pressure is not surprising.


Once the smartphone leader


Although the official position stressed the words of cooperation, but the HTC mobile phone has become an indisputable fact.

According to the consulting firm Nielsen's report, six years ago, HTC was the most brilliant when the share of 21% of the global smart phone manufacturers ranked second, second only to the market share of 29% of Apple.


Encounter multiple "sniper"


HTC is the industry's first entry smartphone one of the enterprises, which also once disdain for the whole industry. In 2008, the domestic mobile phone market is still in the Nokia-led functional machine era.


At the moment HTC has developed its own Andrews system phone. As Andrews system and Apple iOS system against the representatives of HTC in this year launched the world's first equipped with Andrews system smart phone T-Mobile G1, it is this phone, the HTC pushed to the pinnacle of the industry.


Rapid growth continued until the end of 2011.


In the face of HTC's step by step, Apple began to use the "patent" weapons to suppress it.


December 19, 2011, the US International Trade Commission ruling HTC part of the device infringement of Apple's patent, will prohibit some models HTC mobile phone sales in the United States. HTC lost the US market.


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Before the loss of the US market, HTC did not attach importance to the Chinese market, which gave Samsung in the domestic market development and growth of a great opportunity. And wait until the European and American markets after the fall, at the moment the Chinese market has long been no longer the current situation, the Chinese mobile phone market is a major Samsung situation.


After some hard work, HTC in the domestic market just a firm foothold, then encountered the impact of millet. The same configuration, millet price is almost only half of HTC, HTC slowly lost in the mainland market.


Just a few years, HTC from the king of the king of mobile phones fall, the global market share of only 0.68%; the company for nine consecutive quarterly loss, the market value of only 1.9 billion US dollars; stock prices from 2012, 1,300 yuan / Point, the lowest fell to 40.4 yuan / share, down more than 95%.


Brilliant fleeting


And in late April 2016 opened the HTC10 national line version of the pre-sale, this flagship model in the days of cat, Jingdong and other sites only about 100 reservations; a year later, there is a flagship model HTC U11 play , Booking only 40,000 units. Even before and after the 400 times the distance, can not cover the HTC mobile phone sales in the Chinese market even less than other mobile phone manufacturers a fraction of this fact.


According to the September 19 research firm IDC latest data, in the global smart phone market rankings, HTC has completely dropped out of the top ten, the market share of only 0.68%.


As the entire company on the mobile phone business a serious dependence, HTC overall financial situation in the mobile phone market changes in the river.


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Mobile phone trend has gone, HTC rely on to rewrite the fate?


This two years, HTC's earnings mostly loss-based, in the mobile phone under the premise of decline, HTC began looking for other way out. Two years ago, HTC Chairman Wang Xuehong personally as Trader, launched the VR product HTC Vive, and part-time CEO, but Wang Xuehong is actually a gamble. At present, the high-end VR market is still not yet mature, the market annual shipments of only 200 million units, this figure is only a fraction of Apple's iPhone sales.


"Before a few years HTC bet VR, but this market has now cooled down, short-term to its business with not much performance." Wang Yang said.


Rely on the transaction to get the $ 1.1 billion may be able to temporarily renew, but in the mobile phone market has been the trend of HTC, rely on to rewrite the fate, is the ultimate exam.


Smart phone "killed" the HTC was laughing


Google not only did not buy HTC's latest rise of VR business Vive, even before the basic was considered a pinned smart phone business has not been included. Google acquired only the original HTC involved in Google Mobile Pixel project R & D team and non-exclusive license of the patent.


In other words, in this so-called cooperation agreement, HTC benefits are far greater than Google. After Google's capital injection, HTC will be able to overcome the company's smart phone business for many years from the complete liberation, focusing on more market potential and profitability of the VR business.


HTC's CEO, Wang Xuehong, said in a statement: "This cooperation is a very great step, relying on HTC's smart phone and VR business, can make Google's hardware to be fully improved." This means that HTC will retain this Two business.


But in the short term, the investment of 1.1 billion Google, and can not get visible benefits. Rick Osterloh, Google's senior vice president of hardware, is not hesitant about Pixel's future development plans, nor does it explain what thousands of patents he can bring for himself. He said: "Google and HTC in Pixel on the cooperation is very pleasant, but the specific plan can not be published.


However, Google did not choose to buy HTC, which means that it does not need HTC brand value. According to Taiwan's official announcement of the international brand value list, HTC's brand value has dropped from $ 3.6 billion in 2011 to less than $ 400 million last year.


Osterloh said that the agreement with HTC is to continue to expand the hardware business. A year and a half ago Osterloh joined Google, set up an independent hardware department. It is worth noting that Osterloh was the president of Motorola Mobile. In 2011, Google had a total of about 12.5 billion US dollars, 63% premium to the acquisition of Motorola mobile. In 2014, Google will move Motorola to sell to Lenovo. Osterloh also took over at that time.


In this way, Osterloh for how to cooperate with the mobile phone manufacturers is very experienced. The HTC mobile phone hardware design talent to expand their own hardware design strength, means that Google has determined to Pixel product line into the consumer market, which part of the share of Apple and Samsung two high-end mobile phone brand market share.


But in the analysis seems, Google to find HTC mobile phone R & D team is more "emotional" investment behavior, do not rule out is "selfish", the difficulties of the partners to help, HTC finally got reborn.


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