To some degree, the news that Google would purchase at least part of Taiwanese smartphone maker HTC was something that cropped up in the rumor mill from time to time, but it was also something that hit overdrive not too long ago. That news is no longer a rumor as Google officially announced that it has purchased HTC’s “Powered by HTC” research and development division for $1.1 billion.
It wasn’t a particularly small division, either – Powered by HTC comprised half of HTC’s overall R&D team, which makes sense given that the division was in charge of Google’s Pixel and Pixel XL. The deal also gives Google a non-exclusive license for HTC’s intellectual property, which will surely come in handy with future devices.
Counter to previous reports, however, the $1.1 billion deal does not mean that HTC will exit the smartphone market. According to HTC chief financial officer Peter Shen, the Taiwanese outfit will continue to exist as an independent company and develop its own smartphones, including the company’s next flagship.
I hope Google can do to HTC what they did to Motorola
Because of that, the deal does not grant Google access to any of HTC’s manufacturing facilities – only the employees and the IP portfolio. Even so, Google’s now-larger hardware team could allow the company to create more diverse smartphones and possibly its own SoCs, though the latter is more down the road.
Per Google senior vice president of hardware Rick Osterloh:
That’s why we’ve signed an agreement with HTC, a leader in consumer electronics, that will fuel even more product innovation in the years ahead.
As for HTC, it looks to use the $1.1 billion to stay afloat in the smartphone and VR markets, so the company is not in the clear just yet. According to the company, the deal gives it “a more streamlined product portfolio, greater operational efficiency and financial flexibility.”
The $1.1 billion deal is expected to be approved and closed by early 2018.