Google's Acquisition of HTC's XR Business: A Strategic Move for Android XR

In early 2025, the tech industry witnessed significant developments, with Google's acquisition of HTC's XR business standing out as a notable event. This move not only showcases Google's determination to strengthen its presence in the XR market but also adds a significant boost to the Android XR ecosystem.

Google and HTC's History in Smartphone Business

In September 2017, HTC announced the sale of its smartphone manufacturing department, which was involved in the production of Google's Pixel smartphones, to Google for $1.1 billion. This deal included the non-exclusive licensing of certain HTC intellectual properties to Google. At the time, HTC's smartphone business was in decline, with its market share dropping from 21% in 2011 to less than 1% in 2017. The sale allowed HTC to retain 2,000 of its 4,000 R&D personnel while securing funds for new business ventures.

For Google, this acquisition was a strategic step to enhance its hardware capabilities and develop the Pixel series smartphones, aiming to compete more effectively in the smartphone market. This move was seen as a win-win situation, benefiting both companies.

Google's最新的Acquisition of HTC's XR Business

Fast forward to January 2025, Google announced a $250 million deal to acquire part of HTC's XR business. This transaction involves the transfer of some HTC XR R&D team members to Google and the non-exclusive licensing of HTC's XR intellectual properties to Google. The deal is expected to be completed in the first quarter of 2025.

Google's blog post highlighted its long-term investment in XR technology and the recent launch of the Android XR platform in December 2024. The acquisition of HTC's XR team is expected to accelerate the development of the Android XR platform, particularly in the areas of headsets and glasses ecosystems.

The Decline of HTC's XR Business

HTC's XR business, once a leader in the VR market, has seen a significant decline in recent years. In 2019, HTC's VR products held a 35.7% market share, but by the third quarter of 2024, its share had dropped considerably, with HTC being categorized under the "others" segment, holding only 2% of the market. This decline was attributed to intense competition, particularly from Meta's aggressive pricing strategies with the Quest series.

Google's Strategic Intent

Google's acquisition of HTC's XR business is aimed at leveraging HTC's technical expertise, experience, and patents to address some of the shortcomings in the Android XR operating system, particularly in areas such as interaction and image streaming. For instance, HTC's Polygon Streaming technology allows for the lowest latency and highest resolution real-time 3D image streaming in the industry, a significant advantage that could enhance the Android XR platform.

Moreover, HTC's achievement of sending the HTC VIVE Focus 3 headset to the International Space Station for astronaut psychological treatment demonstrates its capability in zero-gravity environments, a unique advantage that could benefit Google's XR ambitions.

Comparison of Google's Acquisitions

While the acquisition of HTC's smartphone business was primarily aimed at bolstering Google's own hardware capabilities, the acquisition of HTC's XR business is more focused on advancing the entire XR industry. This is similar to Google's 2011 acquisition of Motorola Mobility, which was aimed at strengthening its patent portfolio and protecting the Android ecosystem from legal threats.

Conclusion

Google's acquisition of HTC's XR business signifies a strong commitment to the XR market and the Android XR platform. With the addition of HTC's technical expertise and the recent launch of the Android XR operating system, Google is well-positioned to make significant strides in the XR space. The involvement of key industry figures like Hugo Swart, who joined Google in June 2024, further strengthens Google's XR ecosystem strategy and technological capabilities.

As the XR market continues to evolve, Google's latest move could potentially replicate the success of Android in the smartphone market, paving the way for a new era of XR technology.