Industry experts reveal that Google spent $1.1 billion to buy these "treasures"

Leifeng.com has already made a preliminary interpretation of this cooperation agreement in the article "HTC partially "sells" itself to Google, what does the $1.1 billion transaction mean?"

In order to further explore the deep motivations behind this collaboration between HTC and Google, Leifeng.com interviewed several senior professionals and observers in the smartphone and smart hardware industries; perhaps through the views they shared, we can have a deeper understanding of this collaboration.

Question 1: Why is HTC selling?

Zhang Weihua, former CEO of Origin Mobile:

HTC once represented the top level of the Android camp in terms of hardware, but it was basically at a disadvantage in terms of design, product definition, marketing, system optimization, etc. HTC's labor costs remained high, the top management had an overly high self-esteem, never paid attention to the largest market, always had a very good self-esteem, had almost no brand influence, and sold at a very high price; being able to sell it now is already a good result.

Wang Junyu, former CEO of Wandoujia and co-founder of Qingmang:

Although HTC was the first to develop Android, it still failed to catch up. The possible problem is that if it follows the path of traditional manufacturers, it cannot catch up with Samsung because it does not have core technology and weak control over the supply chain; if it follows the path of Internet mobile phone manufacturers, it has not learned marketing.

Zhang Jialin, President of HTC Smartphone and IoT Business:

In 2015, we considered what our strengths and weaknesses were. At that time, we established a concept called Power by HTC, which was different from general OEM. In general OEM, people think about quantity and minimizing costs; HTC doesn’t think that way, but focuses on change. Innovation is actually our strength. After Power by HTC came out, we thought that Google was a good partner, so starting in April 2015, I went to Google almost every month. At the end of that year, Google began to decide to make its own brand of mobile phones. After that, our cooperation became closer and closer, and we have the current agreement.

Question 2: Why did Google buy it?

Mobvoi CEO Li Zhifei:

Google is already making Pixel phones, and I heard they are selling well; it is worth buying HTC at a bargain price now. And I think HTC's hardware innovation is also good. In the era of intelligence, software, hardware, and algorithms must all be strong, and this is the logic behind Google's purchase of HTC.

The rumored Pixel 2 is still manufactured by HTC

Zhang Weihua, former CEO of Origin Mobile:

Google should have taken this step earlier. After all, if they make operating systems, they should also make mobile phones. HTC is good at factory management, and its value lies here; after all, Taiwan's manufacturing management level is still very high. In addition, Google should have seen the great success of Microsoft's Surface series and wanted to try to emulate it; and 1.1 billion US dollars is not a lot, and there must be various requirements and terms to restrict it.

Wang Junyu, former CEO of Wandoujia and co-founder of Qingmang:

Last year I bought all of Google's hardware, and I still think that Google's strength lies in software, and the combination of software and hardware is just right, such as the comparison between Home and Echo, and the comparison between WiFi and Euro. So Google should still hope that after it has the production capacity, its products can be upgraded to a higher level. The boss of Google Hardware is the former president of Moto, who knows how to manage; but it is really difficult to innovate in mobile phones now, and Pixel is not selling well. If it wants to have an influence in the mobile phone market, it may take many years. In addition, the Nexus series, which has become history, also has its own problems. The industrial design is changed every year, which is basically a change of shell, and there is no way to form the continuity of the brand; Pixel may be trying to solve this problem.

LeWa CEO Zhao Li:

Mobile phones are lacking "innovation" nowadays. Perhaps Google's acquisition can be understood as a hope to lead mobile phone innovation again. Google's Nexus series has good ideas and innovations, but due to its lack of understanding of mobile phones and supply chain issues, it is always a bit powerless. Google may hope to make the Nexus concept of leading innovation more in place by acquiring HTC.

Mr. Awesome, the editor-in-chief of AiFei Technology:

From fingerprint to 3D touch to dual camera, and then to the 18:9 full screen mentioned by Xiaomi not long ago, all of them were bottom-up, pushed by manufacturers and supplemented by Google, which is not healthy; it even seriously slowed down Google's own Big Plan, such as Mobile VR/AR. Among many choices, HTC's technical reserves and long-term deep cooperation with Google, as well as its low valuation, make this deal very cost-effective.

Question 3: How is this transaction different from Google's acquisition of Motorola a few years ago?

Zhang Weihua, former CEO of Origin Mobile:

Google acquired Moto for its patents, and after using up the patents, it sold it to Lenovo; but Google hopes to obtain manufacturing capabilities from HTC.

Wang Junyu, former CEO of Wandoujia and co-founder of Qingmang:

This question is also the first one that comes to my mind. However, in detail, it is because the market environment has changed. Google is no longer worried about competing with other Android manufacturers.

LeWa CEO Zhao Li:

It is a good thing that Google has acquired part of HTC's mobile phone team. When Google acquired Motorola, it wanted IP patents to solve its urgent needs at the time; and HTC's significance to Google lies in its understanding of mobile terminals.

Question 4: Is there a big difference between having hardware capabilities or not?

Zhang Weihua, former CEO of Origin Mobile:

If you are making a public version of the product, it doesn't really matter; but if you want to make AI-related chips, specific processing mechanisms and instruction sets, and specific functional points, the difference is still quite large. For example, the Cambrian chip built into Huawei Mate 10 actually rewrote the BSP and Driver by itself, but the kernel, framework, library, and interaction are based on Android. Huawei claims that it will never get stuck, but in fact it has made a lot of changes, even changing the memory mechanism of Android; this is the only way to maximize the value of the hardware. So it is normal to want to make a mobile phone while making an operating system; although it is not absolutely necessary, it will definitely be the best to make it yourself.

LeWa CEO Zhao Li:

The view that "if you don't make hardware, you can't make any achievements in software" is very popular in China, and all manufacturers basically increase investment in the "whole ecological chain (the whole ecological chain includes the market's sales driving ability and market capacity)" based on this to finally gain a dominant position. However, this is determined by the particularity of the domestic market. Americans don't play like this. How can they control this "whole ecological chain" without a supply chain foundation? If they can't control this ecological chain, they will definitely not achieve the above results.

Lian Ning, former Sony mobile phone product manager:

I have been in contact with entrepreneurial teams outside recently, and I feel an obvious change: there are fewer pure software or Internet startups, and many teams want to do hardware. The reason is simple: software startups are based on existing stable platforms such as PCs, mobile phones, Windows, Android, etc., but after so many years of entrepreneurship, there is no room for innovation at the application level; now we need innovation in the underlying platform. Apple has an advantage over Google in AR because Apple understands hardware.

Mr. Awesome, the editor-in-chief of AiFei Technology:

The ultimate goal of making a system is to make a product. Hardware + software is a complete service. The iPhone X’s notch has always been criticized, but for its peers, the full screen + structured light + A11 Bionic + iOS 11 is an integration from hardware to software to chip level. For the entire Android camp, it is a moat that cannot be broken within two years.

Leifeng.com Summary

Overall, this deal has a greater impact on Google than HTC. After all, after the Nexus attempt, Google, which has a strong software gene, has become more and more interested in controlling hardware. And by acquiring HTC's Pixel foundry team, Google has also begun to become "hard" like Microsoft once was.

Google's own-brand Pixel phone has been released for nearly a year, and Google will also launch a new generation of hardware products at the press conference on October 4. These hardware products may be the prelude to Google's true entry into the era of hardware and software integration.