Google to buy HTC smartphone staff for $1.1bn

Google to buy HTC smartphone staff for $1.1bn
(l-r): Rick Osterloh, Google and Cher Wang, HTC, announce the deal.
Published: 21 September 2017 - 12:13 p.m.
By: Mark Sutton

HTC will transfer a number of its Pixel smartphone employees to Google, as part of a $1.1bn deal between the two companies.

Under the deal which was announced today, a number of HTC personnel who have worked on development of the Pixel smartphone will transfer to Google.

Google will also receive a non-exclusive license for HTC intellectual property (IP). The cash deal is subject to regulatory approval and is expected to complete in early 2018.

According to a statement from HTC, the deal will "supercharge [Google's] hardware business", while continuing to support HTC's own branded smartphone strategy and business.

Commentators said that deal marked a move by Google to have more control over Android hardware and to align more closely with key manufacturers, to create a more unified, integrated Android experience.

John Baptista, of Warwick Business School, Associate Professor of Information Systems said: "Despite its larger user base, Google's future in the smartphone market is being threatened by Apple's superior ability to integrate hardware and software centred on user experience.

"The fragmented user experience of Android phones and the increasingly mute voice of Google in this market demands them to raise their stakes and engage more with manufacturers of devices to show more ambition and offer a credible vision for the future.

"This deal with HTC shows confidence that Google has the ideas internally to drive this process, but needs to work more tightly with manufacturers to develop a more consistent experience between the phone and other devices such as wearables, home automation, car automation, as well as increasingly work related applications and integration with office systems," Baptista said.

"Executing its vision in partnership with HTC will set a reference for other manufacturers that use their platform and explain to its users how and why they should continue to engage with Google's products," he added.

"Also, augmented reality and virtual reality look increasingly to be the future for mobile, so it might be that Google needs to work more tightly with chip manufacturers to develop the hardware in conjunction with their software to deliver AR and VR capabilities."

HTC will continue to develop its own flagship smartphone line, and the virtual reality ecosystem to grow its VIVE business

The company said that the deal will enable a more streamlined product portfolio, greater operational efficiency and financial flexibility. It also noted that the agreement represents a significant investment by Google in Taiwan as a key innovation and technology hub.

"As a pioneer of the smartphone market, we are very proud of our history of innovation. Our unmatched smartphone value chain, including our IP portfolio, and world-class talent and system integration capabilities, have supported Google in bolstering the Android market," said Cher Wang, Chairwoman and CEO of HTC.

"This agreement is a brilliant next step in our longstanding partnership, enabling Google to supercharge their hardware business while ensuring continued innovation within our HTC smartphone and VIVE virtual reality businesses. We believe HTC is well positioned to maintain our rich legacy of innovation and realize the potential of a new generation of connected products and services."

"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."

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