TECHNOLOGY

This Potential Deal Could Shake Up The Entire Smartphone Industry

Google’s rumored acquisition of HTC and Apple’s iPhone pricing concerns could signal a power shift in the smartphone industry.

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BY Peter Gasca - 12 Sep 2017

PHOTO CREDIT: Getty Images

Today, Apple will be holding its yearly and oft anticipated Special Event, when it announces new product lines and innovations for the coming year.

Many have speculated an announcement of a new smartphone model, the iPhone8, which has also been rumored to be the most expensive model ever released. In fact, it is so expensive (as much as $1,000) that some have speculated that the price could scare away many early adopters ordinarily loyal to new Apple introductions.

The iPhone price or new features, however, may not be the most covered smartphone news in the near future.

A report on a Chinese language website recently stated that Google is in the final negotiations to acquire HTC's smartphone division. This would be a significant business deal, given that Google has long been jockeying for a bigger part of the $470 billion smartphone market dominated by Apple.

Google already has one of the widest used device operating systems in Android, and while it is responsible for the Google Pixel, a widely lauded smartphone that has even been called better than the iPhone, the company does not actually manufacture any hardware.

This acquisition would "close the loop" for Google, giving them control of the entire smartphone process from design to manufacturing, allowing Google more flexibility to experiment with new features and designs while reducing many of the hardware and software problems inherent to Android phones.

This is not Google's first foray into hardware. In 2011, Google acquired Motorola for an eye-brow raising $12.5 billion. The transition did not go well -- at all -- and Google ended up selling Motorola to Lenovo in 2014, taking close to a $10 billion loss on the entire transaction.

Google took the optimistic view of the Motorola experiment and was ultimately able to pull long term value from the deal. Just last year, under former Motorola President Rick Osterloh, Google created a hardware division that gave birth to products like the Pixel phones, the popular Google Home speaker, and the Daydream View VR headset -- but it does not manufacture.

Google does partner and take an active role with manufacturers, including HTC, to produce the Pixel phones. It also has current plans to continue these partnerships with the upcoming Pixel 2, which is why this deal makes so much sense.

Whether this deal comes to fruition is anyone's guess -- both companies are not commenting on the rumors. Regardless, today's Apple announcement will surely get people talking about the next generation of smartphones -- and if Google stays true to form, they won't like being left out of the conversation.

What do you think? Does this rumor excite you about new Google smartphones? Share your thoughts with others in the comments below.