Google partly buys HTC for US$1.1 bn to enhance Pixel line

Google has signed a definitive agreement with HTC to natively build its Pixel line of smartphones.


Google and HTC have signed a definitive agreement under which Google is set to pay US$1.1 billion in cash to recruit certain HTC employees and receive a non-exclusive license for HTC's intellectual property. The latest move is majorly aimed to enhance the existing Pixel line with new developments and help HTC bolster its presence in the smartphone market.

The transaction, which is subject to regulatory approvals and customary closing conditions, is expected to close in early 2018. The employees that will be hired from HTC will work under former Motorola Mobility chief Rick Osterloh.

"With this agreement, a team of HTC talent will join Google as part of the hardware organisation. These future fellow Googlers are amazing folks we've already been working with closely on the Pixel smartphone line, and we're excited to see what we can do together as one team," saysOsterloh, who's presently the senior vice president of the hardware division at Google.

HTC will continue work on its branded smartphone strategy and even proceed to develop its next flagship model. Further, the Taiwanese company will continue to nurture its VIVE virtual reality business.

A 'testament' to decade-long strategic relationship

Google has preferred HTC as its hardware partner since the first Android smartphone, called the HTC Dream, in September 2008. Both the companies have together brought even the Nexus One in 2010, Nexus 9 tablet in 2014 and the first Pixel phone just last year. Therefore, the fresh agreement is considered to be a "testament" to the decade-long strategic relationship between the two companies.

"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 realise the potential of a new generation of connected products and services," said Cher Wang, chairwoman and CEO, HTC, in a joint statement.

Building experience together

It is worth noting here that while this is the first time when Google has shown its interest in HTC, the company, under the leadership of Larry Page, had acquired Motorola Mobility for US$12.5 billion back in 2011 with the same aim -- to start building user experience together. However, that development didn't result in any great success for any of the two companies and ultimately led to the acquisition of Motorola Mobility to Lenovo for US$2.91 billion.

Having said that, Google and HTC are quite confident to bring fortune through their latest tie-up. The acid test of the partnership would be the Pixel 2 and the next HTC flagship that both are likely to be unveiled in the coming months.