Google Is Paying HTC USD1.1 Billion To Turn Itself Into A Full-Fledged Phone Maker

Under the deal, a handful of HTC employees will become full-on Googlers.

Cover image via BGR

Today, Google announced an agreement to hire a team of engineers from HTC, to help make its own hardware ambitions a reality

Under the announcement, some 2000 HTC employees – many of whom are already working with Google to develop Pixel smartphones – will join Google.

They are currently working with the company to produce the next version of the Pixel, which is expected to be announced on 4 October.

Image via CNET

HTC will receive USD1.1 billion in cash from Google as part of the deal. Google will, however, not take a stake in the firm.

While both sides hope to close the deal by early 2018 and after the deal is finalised, HTC will continue making its own phones, and build VIVE VR products, while investing in other next-generation technologies, including the Internet of Things, AR and AI.

The team of HTC employees, who are members of HTC's "Powered by HTC" division, will stay in Taipei where HTC is headquartered, but they'll become full-on Googlers.

The arrangement builds on an existing partnership between the two tech companies. Additionally, Google will continue to have access to HTC's IP to support the Pixel smartphone family.

The agreement supports HTC’s continued branded smartphone strategy, enabling a more streamlined product portfolio, greater operational efficiency and financial flexibility and at the same time it further reinforces Google's commitment to smartphones and overall investment in its emerging hardware business.

Google hardware executive Rick Osterloh (L) shakes hand with HTC CEO Cher Wang during a news conference to announce Google to acquire HTC's Pixel smartphone division, in Taipei, Taiwan 21 September 2017.

Image via REUTERS/Tyrone Siu

HTC CEO Cher Wang, during the press conference, said:

"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.

"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."

Rick Osterloh, Senior VP of Hardware at Google, said:

"HTC has been a longtime partner of Google and has created some of the most beautiful, premium devices on the market. 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."

The deal marks Google's second major foray into smartphone manufacturing, after the company had bought Motorola's Mobility for USD12.5bn, only to sell it on three years later

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