There is intense speculation today that search engine giant Google is on the verge of acquiring Taiwanese smartphone maker HTC. The smartphone company has requested its shares are suspended until Thursday when the group will release “material information” which many expect to be confirmation of an offer from Google. So far both companies have refused to confirm or deny speculation although HTC shares should be freely tradable after the announcement.
Working together
Even the quickest of glimpses at Google’s smartphone aspirations shows a very close relationship with HTC. The Google Pixel smartphone is manufactured at HTC factories and we all know that Google is behind the android operating system used by companies such as HTC. There will be intense speculation over the next 24 hours but it seems pretty certain that the two groups will combine.
HTC was once one of the major players in the smartphone market with a market share of 9% just five years ago. The success of Apple and Samsung has been to the detriment of HTC which now has a market share of less than 1%. At this moment in time the company is struggling to maintain a voice in the marketplace but a relaunch as part of Google could change all of that.
Innovative but overshadowed
Those who follow the smartphone industry will be well aware that HTC unveiled its latest smartphone in May, the U11. Aside from the traditional applications you would expect in the smartphone of today the U11 allows the user to take selfie and launch apps by squeezing the handset. Innovative, yes, overshadowed by Apple and Samsung, unfortunately the same answer.
There is no doubt that Google has great aspirations to break into the smartphone market and acquiring the HTC operation at “rock bottom” makes perfect sense. At this moment in time the company is in danger of disappearing and with Google looking to expand its smartphone operation, this could be a match made in heaven?
Battle to stay ahead
The smartphone of today is the one item which puts businesses immediately in touch with their customers at the press of a button. For many people their smartphone is their lifeline, the first thing they look at in the morning and the last thing they check at night. There are very few products which have anywhere near this kind of exposure and we have no doubt that Google will be looking to invest a huge amount of money to compete.
Unfortunately, while the likes of Apple and Samsung lead the way others have fallen by the wayside. It will be interesting to see whether Google rebrands HTC, assuming any takeover goes ahead, and what plans the company has for the future. These are certainly exciting times in the smartphone market and with Apple sitting on a huge multibillion dollar warchest, a rumoured HTC acquisition could be the start of further consolidation in the sector.
How will investors react?
It will be interesting to see how markets react once HTC makes its “material announcement” and the response from Google shareholders. A move into the smartphone industry makes perfect sense for Google and is something the company has been looking at for many years. Can the company revive HTC? Will Google become a major player in the smartphone market? We could see at least part of these questions answered in the next 24 hours.