After multiple rumors and reports indicating the move would be made, Google has announced they’re spending $1.1 billion to hire employees in HTC’s smartphone division to further work on the search giant’s smartphones such as the Pixel. HTC will still retain all rights to its smartphone division and even release a new flagship phone as the successor to this year’s U11.
Google’s Senior Vice President of Hardware Rick Osterloh offers a few more details surrounding the deal below.
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.
Since Google and HTC have quite the history together, it makes sense to see such a partnership form like this. But rather actually acquiring resources to further develop smartphones, Google seems interested in obtaining the talent necessary to do so. The New York Times says Google’s getting about 2,000 employees out of this deal from HTC’s estimated 4,000. Therefore, the search giant is obviously pretty focused on becoming a leading contender in the smartphone industry.
As for HTC, they’ll retain all rights to its own smartphone business and “continue to build the virtual reality ecosystem to grow its Vive business, while investing in other next-generation technologies, including the Internet of Things, augmented reality and artificial intelligence,” according to the company.
“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.”
As I noted in a previous article, Google has tried this type of effort before to improve its smartphone business, what with the search giant also buying out Motorola and owning them for a while before the entire deal went down the drain (this PCMag article does a pretty good job of explaining what went wrong). Hopefully, the company doesn’t make the same mistakes this time around with HTC. Otherwise, there’s no telling what the future of their smartphone business will be.
But of course, we’ll stay positive and hope for the best out of this billion-dollar deal. HTC and Google say the deal should close by early 2018. And while we won’t see exact changes in Google’s smartphone division thanks to HTC’s team until that time, the company will be offering assistance to the search giant with the Pixel 2 smartphone which they’ll manufacture.