Continue Reading Below
Google's current-gen Nexus 6. Source: Google.
For Google investors, the smartphone industry has been somewhat confounding. On one hand, Google's open-source Android platform is by far the largest mobile operating system by global market share, edging out Apple's iOS 78% to 18.8% in the first quarter of 2015, according to IDC data.
On the other hand, it's been hard for Google to monetize Android subscribers; Goldman Sachs found that in 2014, Google made more money from iOS users than from its own operating system.
Apple is a clear winner when comparing hardware, though. Its signature iPhone has racked up nearly 140 million unit sales in the last two fiscal quarters, addingmore than $90 billion to Apple's top line in the process. Meanwhile, Google's foray into hardware has been rocky. After seemingly attempting to dive deeper into the business by buying Motorola Mobility in 2011, Google sold the line to Chinese hardware manufacturer Lenovo last year after several quarters of divisional losses.
Google still has the Nexus, a line of phones and tablets it markets and designs while farming out production to OEMs. Recent rumors have suggested that Google is preparing tobring two versions of the next Nexus phone to market, with LG manufacturing a smaller-sized unit reminiscent of the Nexus 5 and Huawei making a larger phablet-like model akin to the current-generation Nexus 6.
Continue Reading Below
It appears the latter rumor at least is correct, as a Huawei employee confirmed to the International Business Timesthat the company is makingthe Nexus phone.
Big win for Huawei, maybe bigger for Qualcomm
While it might not be a household name in the United States, Huawei in the first quarter was the fourth-largest smartphone vendor in the world behind Samsung, Apple, and Lenovo, according to IDC's data. The company is better known in its home market of China and has a following in Europe with its midrange Honor line and flagship P8 model. Although the Nexus line hasn't sold too well in the U.S., the phone is considered a premium model. Plus, any affiliation with Google -- even as simply a manufacturer -- could improve Huawei's brand in the skeptical U.S. smartphone market.
Another big winner appears to be chipmaker Qualcomm , as early reports indicate that the Huawei-manufactured device will use Qualcomm's signature Snapdragon 810 processor.
Recently, this chip has faced additional scrutiny as concerns that it is prone to overheating -- pardon the pun -- heat up. After early reports of overheating by the Snapdragon 801-powered HTC One M9, a benchmark test found the phone can reach temperatures of 130 degrees Fahrenheit -- compared to an average of 104 degrees for comparable phones with different processors. Sony's flagship Xperia Z3, another Snapdragon 810-powered unit, has also been found to overheat, prompting the company to put a warning label on the unit.
In the end, Qualcomm's flagship chip could be OK, as it appears Google and Huawei have no problems using the silicon. In the "perception is reality" world of technology, Qualcomm needed a signature win after Samsung chose its own Exynos processors for its flagship Galaxy S6 and Galaxy S6 Edge instead of the Snapdragon 810.
Qualcomm appears to have gotten this win from Google. Will Google's next Nexus phone find a receptive audience? Who knows, but Qualcomm and Huawei certainly hope so.
The article 2 Big Winners From Googles Next Nexus Phone originally appeared on Fool.com.
Jamal Carnette owns shares of Apple. The Motley Fool recommends Apple, Google (A shares), Google (C shares), and Qualcomm. The Motley Fool owns shares of Apple, Google (A shares), Google (C shares), and Qualcomm. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
Copyright 1995 - 2015 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.