Linked by Thom Holwerda on Thu 21st Sep 2017 10:59 UTC

Rick Osterloh, Google's senior vice president of hardware, writes:

About a year and a half ago, I joined Google to pursue my dream job to create compelling hardware products, built with Google's smarts at their core. As a first step, we brought together various consumer hardware-related efforts and established a single hardware organization within the company. Our team's goal is to offer the best Google experience - across hardware, software and services - to people around the world. Last fall, we introduced our first family of Made by Google products, including Pixel smartphones, Google Home, Google Wifi, Daydream View and Chromecast Ultra, and we're preparing to unveil our second generation of products on October 4. We're excited about the 2017 lineup, but even more inspired by what's in store over the next five, 10, even 20 years. Creating beautiful products that people rely on every single day is a journey, and we are investing for the long run.

That's why we've signed an agreement with HTC, a leader in consumer electronics, that will fuel even more product innovation in the years ahead. With this agreement, a team of HTC talent will join Google as part of the hardware organization. These future fellow Googlers are amazing folks we've already been working with closely on the Pixel smartphone line, and we're excited to see what we can do together as one team. The deal also includes a non-exclusive license for HTC intellectual property.

This may elicit some flashbacks to Google buying Motorola, but said purchase was more about patents than it was about the company's hardware business - and even after selling Motorola, it turned out this was actually a pretty good deal. Google's sale of Motorola supposedly was part of a series of deals with Samsung, which included a patent-sharing agreement and Samsung promising to stick closer to stock Android.

It seems like Google is feeling more confident now, and is willing to risk agitating Samsung by investing in their own hardware capabilities.

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Member since:

I assume this is a troll. There are more than six Android devices sold for every iOS device. This margin is increasing every single quarter. The USA is now the only maket where Apple has anywhere near equal market share.

Don't give me any BS about Apple making 90% of the profits in the smartphone business. It simply isn't true. All the major Android phone makers use Transfer Pricing to minimise their profits. They pay full wholesale prices when they buy components (and even IP and software) from themselves. They don't have to build and staff expsnsive stores or build shrines (new Apple HQ) to themselves.

Reply Parent Score: 5

unclefester Member since:

Edit. Android has close to 90% of new phone sales globally and almost 70% of new phone sales in the US. It is quite reasonable to assume that iOS will have single digit market share in a couple of years.

Reply Parent Score: 4

zima Member since:

All the major Android phone makers use Transfer Pricing to minimise their profits.


Reply Parent Score: 2

jasutton Member since:

I believe what he's saying is that one subsidiary of the company "buys" stuff undiscounted from the another, which looks like lower profits (and hence, lower taxes).

Reply Parent Score: 2

unclefester Member since:

The big Japanese and Korean corporations consist of a central bank and whole lot of subidiaries that are run as seperate businesses.

If Samsung wants to build a phone they borrow money from Samsung Bank at commercial rates to set up a production line. They buy hardware from Samsung Hardware and software from Samsung Software at full market rates. The costs and profits are transferred between divisions. Rather than Samsung Phone making a 40% profit the earnings are split between multiple divisions and tax is reduced. That is how companies like Sony and HTC can sell phones at a "loss" year after year without going broke.

Apple is monolithic and vertically integrated from R&D to sales. So it much harder easier to track earnings. Apple reduces its taxes by shuffling money between countries to reduce tax.

Edited 2017-09-23 03:46 UTC

Reply Parent Score: 3