Google deal adds phone knowhow
$1.1B deal with HTC helps search giant chase Apple.
Google officially closed its $1.1 billion deal with HTC Corp., adding more than 2,000 smartphone specialists in Taiwan to help the search giant chase Apple Inc. in the cutthroat premium-handset market.
The deal will help Google wade deeper into designing its own consumer hardware and special-purpose chips — like Apple. Google’s most recent Pixel model came with a new image processor to improve the device’s camera. More of this “custom silicon” will come in future Pixel devices, Google’s hardware chief Rick Osterloh said.
Osterloh brought in HTC engineers and designers to help Google control more of the design and production of its products, including working more closely with suppliers.
Google previously focused on software and let manufacturers including Samsung Electronics and HTC handle the hardware. But modern phones offer features like augmented reality and artificial intelligence-based services that require close integration of software and hardware.
“You have to be vertical in some cases to really push the envelope for consumers,” Osterloh said. “Our intention is to invest in this for the long term. You’ll see a steady increase in investment from us.”
A bigger step would be to create its own “systemon-a-chip” — the main processors inside phones that Apple now inserts into its devices. Qualcomm Inc. provides the bulk of these chips to Android phone makers, and Osterloh said Google will keep working with the supplier for the foreseeable future.
Still, by designing more silicon itself, Google could cut business for other suppliers.