Google has officially cut out a slice of HTC’s mobile division for itself and paid $1.1 billion to the Taiwanese firm in a win-win deal for both sides. What was once rumored earlier this week as a full-blown acquisition of HTC by Google turns out to be a just a symbiotic deal. According to reports, Google will acquire just a part of the HTC’s smartphone team personnel. The ones that are already working on the Pixel 2. Further, HTC has also agreed to give non-exclusive IP (Intellectual property rights) to Google as part of the deal. This will be used in the hardware designed at Google.
The deal does not make Google a stakeholder in HTC. Instead, the Taiwanese firm will receive $1.1 billion cash infusion to keep the lights on its plants on. Also, the deal does not include selling of any factories or manufacturing assets. This means that Google will continue its way of partnering with OEMs to make its own smartphones. What this part-acquisition will do is allow Google to make in-house designs of future hardware easily.
HTC has already said they are working on their next flagship smartphones. And the deal with Google will not affect their own independent operations. But the cash infusion alone is not going to be enough to solve HTC’s sales problems. If it wants to sell phones, It will have to make some that are irresistible (not big, chunky, shiny, metal bricks). Both the companies have now issued a joint press release, so this is all now in the history books.
HTC has played a vital part in making Google hardware in the past for two years. For example, the Pixels and the Nexus One (codenamed HTC Passion), the first Google phone with the Android OS are the best examples. So acquiring the HTC team gives Google the expertise that is aware of Google’s design priorities.
It also highlights Google’s serious ambition to design its own hardware in the mobile technology segment as stakes grow higher and higher with Apple and Samsung innovations. Google also realizes a full-blown acquisition like Motorola is a big risk, hence this time its foray into hardware has been much more thought out and careful.
In the official announcement, Rick Osterloh, Senior Vice President of Hardware at Google, issued a statement on what this investment will mean for the two companies:
With this agreement, a team of HTC talent will join Google as part of the hardware organization. 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. The deal also includes a non-exclusive license for HTC intellectual property.