Google to Acquire part of HTC’s Smartphone team for $1.1 Billion
Alphabet subsidiary Google announced on Thursday that it signed a $1.1 billion cooperation agreement with Taiwanese smartphone maker HTC. Under the agreement, Google will acquire a team of HTC employees, many of whom have worked with the company on its Pixel smartphone, as well as non-exclusive licenses to some of the Taiwanese company’s intellectual property to help bolster hardware efforts.
This agreement also supports HTC’s continued branded smartphone strategy, enabling a more streamlined product portfolio, greater operational efficiency and financial flexibility. HTC will also continue to build the virtual reality ecosystem to grow its VIVE business, while investing in other next-generation technologies, including the Internet of Things, augmented reality and artificial intelligence.
“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. “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.”
Google and HTC already have a close working relationship, having collaborated on the Google Pixel and Pixel XL smartphones of last year. Rumors that Google was gearing up to purchase HTC began heating up in August. Bloomberg suggested that Taiwanese manufacturer HTC might consider selling off part or all of its company
HTC, once one of the more popular smartphone makers in the United States, has fallen off of most carrier store shelves after several consecutive unsuccessful smartphone launches. It recently launched a separate division that sells virtual reality headsets. In recent years loss-making quarters have become the norm for HTC, which posted its first ever loss making quarter in Q3 2013. And despite management changes, portfolio trimming and even pushing into a new product category (VR) it has been unable to pull its business out of a long slide.
VIVE, the company’s virtual reality headset, went on sale last year and has been well received but the industry’s tepid growth means it is yet to become a lucrative business. Yesterday TWSE announced that HTC Coporation shall be halting trading of stocks in lieu of a major announcement.
Google previously owned Motorola for a brief period of time and seemed intent on the same goal, but that plan ultimately unravelled. What has happened since then is that Google re-hired the Motorola chief it once had, Rick Osterloh, and started a completely new hardware unit, we today call the Pixel.