A new report has come out that claims HTC may have signed an exclusive deal to produce all Nexus phones
for the next three years. It has yet to be confirmed, but it got me thinking because I have been a long-time fan of the Nexus program and the devices it produces. A deal like this would not only be unorthodox, but very important move for both Google and HTC alike.
History has proven that HTC can make solid devices. The HTC One lineup, although not terribly impressive in terms of sales, has been critically acclaimed in many ways year after year. Sure, HTC has made some missteps with cameras and designs that are a little bit too similar
(as in almost identical) to Apple devices. And, HTC has also had a history of making solid Nexus devices with the Nexus One and Nexus 9.
Out of the twelve mobile Nexus devices in the history of the program, I've owned all except the Nexus S, 2013 Nexus 7, and Nexus 5X. The HTC-made Nexus 9 is my current tablet, and in my time with all of the devices, the Nexus One is likely still my second favorite Nexus phone of all time (behind the Nexus 6P and just slightly ahead of the Nexus 5). I'll admit that could be due to the fact that it was the very first Android device I bought after growing bored with the iPhone 3G. It was my introduction to the Android world, which means it will always hold a special place for me, but it was also a damn good phone for its time.
HTC and Google make a good pair, that's not really in question. But, HTC becoming the sole manufacturer for Nexus phones for three years would be a very big move. Assuming the early rumors are true, it would mean two devices this year, and there's no reason to believe the Nexus program would stray from the one-big, one-small lineup going forward. That would ultimately mean six Nexus phones by HTC over the next three years. This would be a big move for a few different reasons.
Long-term is new
First of all, there has never been an officially known long-term Nexus deal before. In fact, no manufacturer has been a Nexus phone partner for more than two years in a row. Samsung got the closest to an unofficial long-term deal by being the only manufacturer to make Nexus devices three years in a row. Samsung was the first with back-to-back phone offerings with the Nexus S in 2010 and the Galaxy Nexus in 2011, completing its trifecta with the Nexus 10 tablet in 2012. LG was the only other manufacturer with back-to-back Nexus phones with the Nexus 4 and Nexus 5 in 2012 and 2013, respectively, then finished its trio with the Nexus 5X this year. Asus also had a back-to-back in the tablet space with the 2012 and 2013 Nexus 7s.
If this deal means six HTC Nexus phones over the next three years, that would put HTC at five total Nexus devices after this year alone, and at a total of eight by the end of the run. Even if we were to see a new tablet or two from a former Nexus partner, that would effectively make HTC the biggest name in the Nexus game.
HTC's needs partners
This brings me to the second reason a move like this would be so huge: HTC itself. As I mentioned earlier, HTC has had a fall from grace. The company was once one of the major players in the mobile market and was legitimately considered to be a potential threat to Samsung's dominance. But after a couple years of bad management and too many devices, HTC has fallen hard. Over the past couple of years, there was serious conversation over whether HTC might go under or be bought out by another company.
Google was rumored to be interested in buying HTC at one point, as was Facebook. The company seems to be on a bit more solid ground right now, but not by much. The HTC smartphone lineup still hasn't been too successful, but the HTC Vive virtual reality system has been getting a lot of buzz. Of course, that buzz might not prove much about HTC itself, because the Vive is really more the result of Valve development and HTC manufacturing.
That alone could be kind of telling though. If HTC really has signed an exclusive deal to be the Nexus manufacturer, it shows faith by Google that the company is a worthy partner. From HTC's side of the table, a deal like this could be an admission that HTC can't go at it alone. The company may realize that without help it can't stand up to bigger players like Lenovo/Motorola, Xiaomi, and Huawei, let alone the top dogs of Samsung and Apple.
HTC partnered with Google for the Nexus 9 in 2014 and now with Valve for the Vive this year, and both look to be wins for HTC. The Vive is getting solid early reviews; beating the Oculus Rift to market should be helpful; and Valve has the gaming pedigree to trust. The Nexus 9 wasn't a very popular tablet, but the interesting thing about the Nexus program is that when devices are done well (which the Nexus 9 hardware was), the praise goes to the manufacturing partner, but when a device disappoints (which the Nexus 9 did in sales), the blame tends to go to Google for its restricted release strategy.
The future of Nexus
That leads to the last reason why this potential deal could be important: what could it mean for the future of the Nexus program. If this is true, it would indicate Google really is sticking behind the Nexus program and may not be planning to build its own devices. But, it also could mean that Google understands how it has painted itself into a corner with Android and Nexus.
On one hand, Google probably would like to make its own Android hardware. The company has proven it can make good hardware with the Chromebook Pixel and Pixel C, but going deeper into making its own Android phones is a dangerous proposition. Android manufacturing partners were troubled by Google owning Motorola because they didn't want a giant like Google as a competitor, not to mention Google would be able to more deeply integrate and optimize the hardware and software in ways other manufacturers couldn't. Ultimately, Google allegedly made a deal
to keep Samsung happy which meant that Google sold Motorola
and Samsung would lighten its oppressive Android UI skinning.
On the other hand, manufacturers reportedly don't like being Nexus partners all that much. The Nexus program is a lot of work for very little payoff. Consider it from the manufacturer perspective: you work with Google developing a device which you build with Google's supervision, then the device gets an extremely limited release, not much marketing, and is often sold at a reduced price. That's a lot of work for not much profit.
The best examples of Nexus partners have been those who aren't necessarily aiming for profit, but rather want the exposure that it brings. Samsung was too big for the Nexus program, even going so far as to take over the Samsung Galaxy Nexus branding with its own name and its Galaxy branding. However, LG, Asus, and Huawei have all gotten nice boosts by being associated with the Nexus brand.
A three-year deal with HTC might actually give Google the best of all scenarios in the Nexus program. Google isn't doing the manufacturing, so other OEMs won't get annoyed, but its partner also isn't in position to demand too much. And, maybe best of all, it allows Google to have a long-term strategy for the Nexus program that it could never quite do before. At best, Google has been able to focus on one or two areas that it would want to refine, like adding the fingerprint scanner and improving the cameras in this year's Nexus phones.
With three years to plan how each Nexus device will evolve and three years to work with the same manufacturing partner on seeing through that plan, Google can have a aim higher. Also, having that time to work with one partner could allow Google to add optimizations that it normally couldn't. Now, it's just a matter of seeing if having a small partner like HTC get this treatment is enough to anger other Android partners.