On Thursday, Google announced that it would acquire Taiwanese tech firm HTC’s smartphone arm, including its 2,000 employees, for $1.1 billion.
This is not the first time Google has bought a handset maker. In 2011, it acquired Motorola for $12.5 billion, but sold it off to Lenovo three years later.
“The latest deal would have little impact on Samsung as Google is unlikely to restart smartphone production,” said Park Kang-ho, an analyst at Daishin Securities.
“The global smartphone market is already too mature for new entrants to expand their share. Also, the position of current top players, Samsung and Apple, is too solid,” Park added.
This global smartphone market, which is estimated to grow less than 5 percent this year, is currently dominated by Samsung, Apple and Huawei. Their combined sales account for more than 40 percent of the total market share.
HTC, which used to vie for the top spot in the global handset market before 2010, is now ranked 30th with a 0.7 percent share.
Instead of joining the competitive smartphone race again, Google is expected to seek new business opportunities, such as augmented reality, virtual reality, smart home and autonomous driving, by integrating the technologies with smartphones, analysts viewed.
“Through the deal, Google is expected to focus on securing hardware technologies for next-generation businesses including VR, AR and self-driving cars,” Park said.
Google’s tech rivals, Apple and Samsung, are already seeking new businesses based on their handset technologies.
Apple recently unveiled its flagship smartphone iPhone X featuring augmented reality technology. It also distributed AR kit to developers through updated operating system iOS11 this month.
Samsung also pushed into diverse new businesses including smart homes, virtual reality and autonomous driving with the aim of integrating them with its smartphones.
By Shin Ji-hye (firstname.lastname@example.org)