Google, All in or Fall in

Benedict Evans, writing in his newsletter:

Google paid $1.1bn for part of (struggling) HTC’s smartphone team (~2,000 people) plus some non-exclusive IP rights. It remains very unclear how far Google wants to go into making its own phones. Android has lost the greater part of the high-end to Apple, and that seems unlikely to change.

What do you mean it is “unclear how far Google wants to go”? They just spent a billion dollars. Google poached one of the top Apple chip architects in June. The Pixel phones are priced identically to the iPhone. Not only is Google serious about making their own phones, it is only a matter of time before Google starts building their own chips for those phones. iPhones are great because the software and hardware are built together. There is no equivalent of this on Android. It’s why Apple’s chips blow the competition out of the water. Especially as phones start doing more specialized tasks like AR/VR, machine learning, etc. Chips need to be purpose built to optimize for these use cases. Software is eating the world and now hardware is eating software. As for Benedict’s point that Apple’s dominance in the high end “seems unlikely to change”, I agree. The battle may already be over and Apple very well could own the high end phone market until the next paradigm shift in computing. But on the eve of Google’s largest hardware event ever, let’s see what they got.

Originally published on no gradient.

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