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HTC Announces $1.1BN Cash Deal With Google

HTC and Google have been working together for a decade, and it's important to remember what that partnership has achieved. It gave us the very first Android smartphone called the HTC Dream (T-Mobile G1), the Nexus One, the Nexus 9 tablet, and most recently the Pixel smartphone. The second generation Pixel will also be a phone created with HTC. This partnership is clearly very important to Google, so Google just spent $1.1 billion in cash ensuring it continues.

In a post on the Google Blog, Google's senior vice president of hardware, Rick Osterich, both announced the deal and stated, "It's still early days for Google's hardware business." It's a clear declaration that Google is in this for the long haul and that hardware is becoming a very important part of the business, and will continue to do so for the next few decades.

As for what this deal with HTC gets Google, it boils down to talent and IP. Google selected a Pixel-focused team of talent from within HTC's organization which will move over to work for Google's hardware division. Google also gains a non-exclusive license for HTC intellectual property. It means we won't see any legal action occurring between the two companies, but also that Google can better protect itself against any other company choosing to sue over some alleged hardware-related patent infringement.

By remaining independent, HTC will continue to develop and release HTC-branded smartphones as well as HTC Vive virtual reality hardware. The company also has its sights set on the Internet of Things, augmented reality, and AI products.

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The one remaining question is: why didn't Google simply acquire HTC outright? I think the simple answer to that is: it didn't need to. The two companies already work well together and have done so for a decade. Acquiring HTC would have cost billions more, faced much closer regulatory scrutiny, and likely put an end to the Vive division and any other R&D projects HTC had set in motion. Some of those may prove important in the future, so why mess with that? Google just became an even more important partner for HTC, and if they continue to innovate, that acquisition could eventually happen.

The transaction is, of course, subject to regulatory approval. Both companies expect to close by early 2018.

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Apple has strongly criticized Australia’s anti-encryption bill, calling it “dangerously ambiguous” and “alarming to every Australian.” The Australian government’s draft law — known as the Access and Assistance Bill — would compel tech companies operating in the country, like Apple, to provide “assistance” to law enforcement and intelligence agencies in accessing electronic data. The government claims that encrypted communications are “increasingly being used by terrorist groups and organized criminals to avoid detection and disruption,” without citing evidence. But critics say that the bill’s “broad authorities that would undermine cybersecurity and human rights, including the right to privacy” by forcing companies to build backdoors and hand over user data — even when it’s encrypted. Now, Apple is the latest company after Google and Facebook joined civil and digital rights groups — including Amnesty International — to oppose the bill, amid fears that the government will rush through the bill before the end of the year. In a seven-page letter to the Australian parliament, Apple said that it “would be wrong to weaken security for millions of law-abiding customers in order to investigate the very few who pose a threat.” “We appreciate the government’s outreach to Apple and other companies during the drafting of this bill,” the letter read. “While we are pleased that some of the suggestions incorporated improve the legislation, the unfortunate fact is that the draft legislation remains dangerously ambiguous with respect to encryption and security.” “This is no time to weaken encryption,” it read. “Rather than serving the interests of Australian law enforcement, it will just weaken the security and privacy of regular customers while pushing criminals further off the grid.” Apple laid out six focus points — which you can read in full here — each arguing that the bill would violate international agreements, weaken cybersecurity and harm user trust by compelling tech companies to build weaknesses or backdoors in its products. Security experts have for years said that there’s no way to build a “secure backdoor” that gives law enforcement authorities access to data but can’t be exploited by hackers. Although Australian lawmakers have claimed that the bill’s intentions are not to weaken encryption or compel backdoors, Apple’s letter said the “the breadth and vagueness of the bill’s authorities, coupled with ill-defined restrictions” leaves the bill’s meaning open to interpretation. “For instance, the bill could allow the government to order the makers of smart home speakers to install persistent eavesdropping capabilities into a person’s home, require a provider to monitor the health data of its customers for indications of drug use, or require the development of a tool that can unlock a particular user’s device regardless of whether such tool could be used to unlock every other user’s device as well,” the letter said. Apple’s comments are some of the strongest pro-encryption statements it’s given to date. Two years ago, the FBI sued Apple to force the technology giant to build a tool to bypass the encryption in an iPhone used by one fo the the San Bernardino shooters, who killed 14 people in a terrorist attack in December 2015. Apple challenged the FBI’s demand — and chief executive Tim Cook penned an open letter called the move a “dangerous precedent.” The FBI later dropped its case after it paid hackers to access the device’s contents. Australia’s anti-encryption bill is the latest in a string of legislative efforts by governments to seek greater surveillance powers. The U.K. passed its Investigatory Powers Act in 2016, and earlier this year the U.S. reauthorized its foreign surveillance laws with few changes, despite efforts to close warrantless domestic spying loopholes discovered in the wake of the Edward Snowden disclosures. The Five Eyes group of governments — made up of the U.K., U.S., Canada, Australia and New Zealand — further doubled down on its anti-encryption aggression in recent remarks, demanding that tech companies provide access or face legislation that would compel their assistance. ‘Five Eyes’ governments call on tech giants to build encryption backdoors — or else

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