The HTC Acquisition
On Sept. 21 Google announced a $1.1 billion acquisition of an engineering team from HTC, one of its Android OEMs. The logic behind this is clear. Google cannot rely on the Android ecosystem to produce competitive devices in an AI-first world and without those devices its vulnerability to Apple only increases. That is the strategic rationale for the HTC acquisition. It is a logical step for Google given the release of the Pixel, the first Google branded smartphone, almost exactly one year ago. That device was produced in partnership with HTC but now Google can bring all facets of design and manufacturing completely in house.
I expect to see Google integrate custom neural net silicon into the smartphone to efficiently partition the AI workload between the phone and the cloud. Google Assistant will become more capable and possibly more private, thus blunting one of Apple’s main competitive advantages. Meanwhile, the number one Android OEM, Samsung, is by all accounts faltering in its efforts to position Bixby as an alternative to Google Assistant and Siri.