Google signs $1.1bn HTC smartphone deal
HTC company logoImage copyrightGetty Images

Alphabet’s Google has struck a $1.1bn (£822m) deal with Taiwan’s HTC to expand its smartphone business.

Google will not take a stake in the firm, but some HTC staff will join the Silicon Valley giant.

The Taiwanese company was once a major player in the smartphone market but has struggled to compete with the likes of Apple and Samsung.

Google expects the deal to close by early 2018, provided it gets the all clear from regulators.

Shares in HTC were suspended in Taiwan on Thursday.

Betting on hardware

The deal marks the latest move by Google to boost its hardware capabilities.

“It’s still early days for Google’s hardware business,” the firm’s senior vice-president of hardware Rick Osterloh said in a blog post on Google’s website.

Under the deal, Google will acquire a team of people who develop Pixel smartphones for the US company and receive a non-exclusive license for HTC’s intellectual property.

It builds on an existing partnership between the two tech companies.

“These future fellow Googlers are amazing folks we’ve already been working with closely on the Pixel smartphone line,” Mr Osterloh said.

According to HTC half their smartphone research and development team – about 2,000 people – will go to Google.

HTC manufactures Google’s smartphones, the Pixel and Pixel XL. The company will release updated version of the devices next month.

Image copyrightGetty Images
Image caption Google will unveil new products including smartphones next month

Analysis – Dave Lee, BBC North America technology reporter, San Francisco

Yesterday, within just a few hours, most of Apple’s millions upon millions of users were using the latest mobile operating system, having tapped on the prompt to download iOS 11.

Contrast that experience on Android, where the company’s impressive and innovative updates are greatly hampered as it can take months, sometimes years, for those features to filter to users.

Google knows this disconnect between its software and hardware is a massive problem. And so this curious deal with HTC, which falls short of the rumoured buyout, is about solving that problem. If it can have close control over key premium devices, it can be more ambitious with its software.

In some respects, this $1.1bn deal is like a good friend lending their pal a few quid to tide them over for a while. HTC needs Google’s money to keep going. And Google needs HTC’s expertise and manufacturing capability to remain competitive with its mobile devices.

Deal benefits

The deal marks Google’s second major foray into smartphone manufacturing. In 2011 Alphabet, then named Google, bought Motorola’s Mobility for $12.5bn, only to sell it on three years later.

Geoff Blaber from CCS Insight said while the HTC deal might “raise eyebrows” given Google’s history with Motorola, it will give the firm valuable design and engineering resources.

“The far bigger risk for Google would be to stand by and do nothing as hardware becomes an all-important means to an end for its core business,” Mr Blaber said.

But the big winner is HTC.

“It’s a much needed investment as HTC struggles to maintain its smartphone business and grow its early start in virtual reality,” he added.

HTC makes Vive, the VR headset favoured by Google, as the alternative Oculus Rift is owned by Facebook.

Vive is reportedly outselling Oculus Rift by a margin of nearly two-to-one, albeit with still modest numbers, and is recognised by many as the superior system.

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US Navy to use Xbox controllers on highly sophisticated submarines
A Microsoft Xbox controller is seen at the Electronic Entertainment Expo, or E3, in Los Angeles, June 17, 2015.

A Microsoft Xbox controller is seen at the Electronic Entertainment Expo, or E3, in Los Angeles, June 17, 2015. (Reuters)

Virginia-class submarines, equipped with some of the U.S. Navy’s most highly advanced and sophisticated technology, will soon use Microsoft Xbox 360 controllers to operate the periscope.

Unlike the traditional rotating tube periscope, these submarines use photonic masts that display the images on screens, so multiple Navy personnel can view at once.

But the problem with the photonic masts is that they’re controlled by a complex joystick, which junior officers and sailors described as “clunky” and “real heavy,” Lt. j.g. Kyle Leonard, the USS John Warner’s assistant weapons officer, told the Virginian-Pilot.

In addition, the current system used to operate the photonic mast and imaging panels costs about $38,000, the newspaper reported.

The idea of using an Xbox controller stemmed from a collaboration effort between Lockheed Martin and Navy officials looking for a less expensive solution, and a way to incorporate everyday technology.

“That joystick is by no means cheap, and it is only designed to fit on a Virginia-class submarine,” Senior Chief Mark Eichenlaub, the USS John Warner’s assistant navigator, told the Virginian-Pilot. “I can go to any video game store and procure an Xbox controller anywhere in the world, so it makes a very easy replacement.”

Google, HTC sign $1.1B USD cooperation agreement to boost Google’s hardware game

Google and HTC have entered into an agreement where certain HTC employees will join Google. As part of the transaction, HTC will receive $1.1B USD in cash from Google. Google will also receive non-exclusive license for HTC’s intellectual property. HTC says many of the employees worked with Google to develop the Pixel smartphones.

This is seemingly part of the search giant’s new hardware strategy, which is why it ended up acquiring part of another smartphone maker despite having previously acquired and then divested itself of Motorola’s mobile business.

Sources had reported that the reason share trading was halted on September 21 was because of a major pending announcement, and a VentureBeat report included an internal invitation for HTC staff to an all-hands meeting at which the news would be announced.

Media waiting outside during Thursday’s internal announcement at HTC headquarters in Xindian, New Taipei City

HTC has helped create a number of Google devices, and provided the manufacturing for the Pixel, and made earlier hardware before Google took over design duties for its own smartphone hardware.

“HTC has been a longtime partner of Google and has created some of the most beautiful, premium devices on the market,” said Rick Osterloh, Senior Vice President of Hardware at Google, in a released statement. “We’re excited and can’t wait to welcome members of the HTC team who will be joining Google to fuel further innovation and future product development in consumer hardware.”

The Taiwanese company has focused increasingly on its emerging VR business, which includes the HTC Vive headset. It continues to make its own smartphones, too, and received some high critical praise for its U11 device this year.

The deal between Google and HTC will see the latter company retain its branding, but Google will take over some of its hardware engineering resources, which should help it own even more of its device-making process. Google had stepped back from in-house hardware after selling its Motorola unit to Lenovo, but recently re-engaged on that front with a different approach focused on premium smartphones, as well as accessories and smart home and connectivity devices like Google WiFi, and Google Home.

Featured Image: JOSEP LAGO/AFP/Getty Images

Polly’s teen polling app piggybacks on Snapchat

Snapchat doesn’t technically have a developer platform, but that hasn’t stopped other startups from taking advantage of its new feature for attaching links to your Snaps and Stories. Sarahah was the first, allowing people to ask fellow Snappers for open-ended anonymous feedback. But the problem is that those requests could be met with cyberbullying.

Polly is a new teen sensation that’s similarly spread through Snapchat. But the lightweight polling apps for iOS and Android protect users by allowing them to create multiple choice questions where they define the answers. It’s quick and easy enough to hold the attention of fickle teens, allowing it to rack up 20 million users and 100 million answers last month.

Here’s how Polly works. Write a request or rifle through randomized suggestions like “What’s your spirit animal?” or “What am I best at?”, make up some answers, grab the mobile web link, create a Snap promoting your poll, attach the link, and publish. Your audience can follow your cue to swipe up to open the Polly poll in Snapchat’s internal web browser, and answer without having to login.

That last fact is what’s let it grow so quickly. Those 20 million users don’t necessarily have the Polly app where you make the polls, so they could slip away if friends stop posting questions. But it’s still a mark of success for a team that’s been experimenting for years looking for a hit.

Ranidu Lankage launched electronic music discovery app The Drop in 2015 with his partner Justin Kan, who had started Twitch and sold it to Amazon. But after The Drop and several other music products didn’t quite blow up, Lankage and Kan founded Whale, a video Q&A app.

Whale aligned with the short-form video and candid social media trends of the day, and was admitted to the prestigious Y Combinator acceleator. But keeping content quality high and easy to browse on Whale proved difficult, and growth wasn’t stellar. One day on the way to YC’s Mountain View headquarters, Lankage tells me he and his co-founders James Zhang and Vicc Alexander realized “We enjoyed polls. We’d seen them on Twitter and other apps, and we thought wed’ be able to bring them to a new platform.”

They finalized the idea, and pivoted Whale into Polly to complete YC. Both Whale and Polly are about getting people to share their thoughts. Polly just simplifies that to a multiple-choice question instead of forcing people to record videos that take time and can make users feel self-conscious.

That’s pushed Polly up to the #13 social app in the US this week, passing hot startup Houseparty.

Lankage sympathizes with Snapchat not offering an official developer platform because “APIs are most of the time abused by developers. You’ve seen that with Zynga on Facebook” Lankage explains. Developers spam people’s contacts or post without a user’s permission.

“But on Polly, you have to do linking manually, so you have to build something people actually” Lankage says.

The question will be whether users and Polly’s team are creative enough to keep coming up with compelling poll questions. There’s not much to do in the app right now, so it could get stale, though Polly plans to add direct messaging and more features to keep teens hooked.

Polly will also have to compete with Sarahah and fast-rising anonymous app TBH. Polly could get a big boost if Instagram decides to allow normal users to post links in their Stories, instead of just allowing verified profiles to do that. But until then it’s at the mercy of Snapchat, which could decide to block links to Polly. Snap and Instagram could always build their own polling features too.

Piggybacking on another app is a gamble. You get easy growth, but risk your distribution suddenly disappearing, ruining the user experience. We’ll see if Polly‘s dependence on other apps is the right answer.

Amazon ‘reviewing’ website after suggesting bomb-making materials to customers
Amazon said the company is reviewing their website algorithm after reports surfaced that certain ingredients used to make homemade explosives were showing up as suggestions for customers to buy.

Amazon said the company is reviewing their website algorithm after reports surfaced that certain ingredients used to make homemade explosives were showing up as suggestions for customers to buy. (REUTERS/Mike Segar/File Photo)

Amazon said the company is “reviewing” its website algorithm after it reportedly suggested bomb-making materials to customers after they made purchases.

The company made the statement on Wednesday after Channel 4 News, a British media company, reported that items, such as steel ball bearings and remote detonators, were found in the “Frequently bought together” and “Customers who bought this also bought” sections after customers purchased seemingly innocent products like cooking ingredients.

The items were all completely legal to purchase individually, the outlet reported on Monday. But together, they began to make up the needed components of a homemade explosive device.


“All products sold on Amazon must adhere to our selling guidelines and we only sell products that comply with UK laws,” Amazon said in the released statement.

“In light of recent events, we are reviewing our website to ensure that all these products are presented in an appropriate manner,” they said. “We also continue to work closely with police and law enforcement agencies when circumstances arise where we can assist their investigations.”

Authorities have successfully prosecuted people whose purchase history showed they had bought several of the items needed to make explosives, Channel 4 reported.

This comes after a terror attack on Sept. 15 in London’s subway system. 30 people were reportedly injured after a homemade explosive, planted in a bucket, went off on a packed London Underground train.

Amazon is not the only company to receive a backlash lately about their website features. Facebook and Google were recently criticized after reports surfaced that the companies had reportedly allowed advertisers to specifically target racist and anti-Semitic keywords or audiences.

ClassPass begins testing variable pricing as it expands beyond studio fitness

On the heels of its $70 million Series C, an expansion to new markets, and a partnership with Blink Fitness, the popular workout subscription service ClassPass is now beginning to experiment with variable pricing. The test was revealed by new ClassPass CEO Fritz Lanman, speaking on stage at TechCrunch Disrupt SF this afternoon.

The idea to try out a virtual currency of sorts came about because ClassPass has been working to extend its business model to go beyond your typical gym class. With its Blink Fitness deal, for example, it added co-memberships – meaning ClassPass subscribers can opt to pay another $15 per month to have a real gym membership. And the company is expanding to include CrossFit locations, group runs, and even team sports, by way of rec leagues, among other things.

“We really started in studio fitness, and now we’re expanding to more types of fitness,” explained Lanman.

With all the different types of workout experiences available, ClassPass’s business model now has to evolve as well.

Right now, you buy an either 3, 5 or 10 class plan on ClassPass which can be used at any of the 8,500 locations in its network. That’s been working well so far – ClassPass recently said it doubled its member base in the past year and has grown to 35 million reservations to date.

“We have really strong product-market fit with a particular type of customer,” said Lanman. “But there’s some people we don’t work great for – like people who want more value for their money,” he admits.

The problem is that whether you take a yoga class at a gym or a Flywheel indoor cycling class (the latter being more expensive), both would cost you one class credit. The solution ClassPass is testing to solve this issue is variable credit currency within the ClassPass system.

In other words, ClassPass users would be able to better control how they want to spend their credits. If they wanted more workouts, they could decide to go to lower cost inventory, less popular classes, or go at times when the class wasn’t typically as full.

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“In these experiments, we’re seeing what would happen if we only charge you half of a class to go to a gym visit, or maybe to an off-peak class,” said Lanman. “It’s cheaper for us to buy it, so we should give the consumer an incentive to try it,” he explained.

That means people could work out more for the same budget – something that might appeal to those who think that a program like ClassPass isn’t affordable enough to meet their needs.

And on the flip side, this variable pricing system would also remove the limitation currently in place on being able to visit your favorite studios multiple times per month. Instead, you’d be able to go as much as you wanted – it would just get a little more expensive the more you want to go.

You might pay a few dollars extra, or pay a class and a half, in terms of credits, to go, the exec said.

This new pricing mechanic could also serve ClassPass as it expands beyond fitness, Lanman added.

“It would be really hard for us to introduce a massage into the current subscription, or going to visit the opera, or taking a language learning class,” he noted.

The company just began testing this pricing model in the last month or so with a subset of users in San Francisco and Chicago, we understand. There’s no formal ETA as to when it will arrive to the broader customer base at this time

And the winner of Startup Battlefield at Disrupt SF 2017 is… Pi

At the very beginning, there were 22 startups. After three days of incredibly fierce competition, we now have a winner.

Startups participating in the Startup Battlefield have all been hand-picked to participate in our highly competitive startup competition. They all presented in front of multiple groups of VCs and tech leaders serving as judges for a chance to win $50,000 and the coveted Disrupt Cup.

After hours of deliberations, TechCrunch editors pored over the judges’ notes and narrowed the list down to six finalists: Augmedics, colormass, Future Family, Matic, Onēva and Pi.

These startups made their way to the finale to demo in front of our final panel of judges, which included: Theresia Gouw (Aspect Ventures), Kirsten Green (Forerunner Ventures), Aileen Lee (Cowboy Ventures), Ann Miura-Ko (Floodgate), Matthew Panzarino (TechCrunch) and Krishna Yeshwant (GV).

Applications for the Startup Battlefield at Disrupt Berlin are now open. Please apply if you’d like to participate.

And now, meet the Startup Battlefield winner of TechCrunch Disrupt SF 2017.

Winner: Pi

Pi is building a device that can charge multiple devices within about a foot in any direction. It’s not the full-room charging concept that other companies have spent years trying to tackle, but it provides a good bit more flexibility over a pad.

Read more about Pi in our separate post.

Runner-up: Oneva

Onēva enables employers to offer elder, infant and child care, as well as housecleaning and other in-home services, as employee benefits. All of Onēva’s providers are verified through FBI background checks, criminal background checks, reference checks and ID verification.

Read more about Onēva in our separate post.

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Why women are coming forward about harassment and discrimination

It’s been the talk of the summer in Silicon Valley. CEOs at Uber and SoFi lost their jobs after whistleblowers came forward, alleging sexism and harassment. Powerful venture capitalists, including Dave McClure from 500 Startups lost their jobs after women, including Sarah Kunst, accused him of making inappropriate advances when seeking a job at his venture firm.

Workplace harassment isn’t new, but we’re talking about it more than ever. So what’s inspiring these women to speak up?

Kunst, who joined us on stage at TechCrunch Disrupt, said that she felt encouraged after watching other women share their stories. “Seeing women like Elen Pao, seeing women like Susan Fowler come forward tell their stories, be believed and realizing that that’s what it took.” She said that she first tried to address the situation privately, but it wasn’t resolved.

Kunst, who’s a founder and CEO at Proday, says that too many work environments aren’t receptive to a discussion about these problems. “If you’re a manager…and no one has ever come to you with an issue about being harassed or feeling discriminated against, you are not encouraging open communication in your company,” she said, suggesting that these issues are common enough that they’re happening everywhere.

She was joined on the panel by Kim Scott, a former Google exec who now advises executives at companies like Dropbox and Twitter. She also authored the book, “Radical Candor.” Hilary Gosher, managing director at Insight Venture Partners and board member at Parity Partners was on stage as well.

“For so long women were told you’ll never get a job, you’ll blow up your life if you come forward,” said Scott. She advocates “teaching people the importance of bringing it up early. Not making a big deal of it is going to prevent these big explosive blowups later.”

Gosher believes that “people aren’t going to change unless they’re forced to change.” She said that the dramatic Uber situation should be a warning for other leaders. “Some of the boards like Uber turned a blind eye for many months until things became very obvious.”

The conversation was largely solutions-driven, focusing on what men and women can be doing to improve work environments, making them an inclusive place for everyone.

Click the link above to watch the full conversation.