Google and HTCsaid to be in "final stage" of negotiation for sale or investment

There is no smoke without fire, as they say, and the smoke around HTC’s rumored “strategic options” is only getting thicker.

According to Taiwanese publication Commercial Times (cited by Digitimes, via Phone Arena), the embattled manufacturer is in advanced talks with Google for a potential sale or strategic investment.

Specifically, the report claims HTCwants to sell its rapidly deteriorating smartphone business, but not its Vive VR business. Talks between HTC and Google are said to be in the “final stage of negotiation” and a final decision could be made by the end of the year.

We’ve heard this before

The story follows the Bloomberg report from August 24, which first revealed that HTCis weighing “strategic options” that include taking an investment from a partner and selling or spinning off the Vive unit. Bloomberg named Google as one of the companies that were talking to HTCabout a potential deal. A sale of HTCin its entirety was deemed unlikely by one person familiar with the matter, because it would be difficult to find an interested partner.

Getting desperate

It’s clear that HTCis in dire need of help. The company just announced its results for August 2017 and, even for a company that has grown used to bad results, the bottom line is catastrophic. HTCreported the lowest revenue for the month of August in 13 years. At a little under $100 million, revenue was 51.5 percent lower than in July and 54.4 percent lower than in August 2016.

To put things in perspective, the last time HTCmade so little money in August was in 2004, when the Motorola Razr V3 was all the rage, the iPhone was still in early development, and Android was just a glimmer in Andy Rubin’s eyes.

This time it’s different?

The question is, why would Google buy another ailing smartphone maker? After the surprise acquisition – and the quick offloading – of Motorola, it seemed that Google was done with hardware adventures. But a lot has changed since 2014. Google is now the proud owner of its own brand of smartphones and a growing ecosystem of consumer devices. The company is well on the way to becoming a consumer electronics company that competes with Apple, Amazon and Microsoft, not to mention a myriad of Android OEMs.

It could be that Google has realized that, if it wants to stay relevant for the next decades, it needs to control software, services, content, AI, cloud, and hardware. It already excels in all non-hardware areas, and buying HTC’s established, albeit struggling hardware operation could help it become a hardware powerhouse as well. Newer rumors of a strategic investment in LG could be interpreted in the same way.

Let’s not get to ahead of ourselves though – this is just a rumor after all, and even if it’s accurate, there’s no guarantee a deal will be reached. Google can afford to wait; it’s only HTCthat really needs a deal.