Google to buy part of HTC smartphone team – namely the Pixel team — for US$1.1B
As part of the agreement, Google will also receive a non-exclusive license to HTC’s intellectual property (IP)
Google has announced it will spend US$1.1 billion to acquire part of HTC’s smartphone division. This will include many employees who are currently developing Google’s Pixel line of smartphones.
As part of the agreement, Google will get a non-exclusive license to HTC’s intellectual property.
“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,” said Cher Wang, Chairwoman and CEO of HTC, in an official press statement.
“In many ways, this agreement is a testament to the decade-long history of teamwork between HTC and Google. Together, we’ve achieved several mobile-industry firsts, including the first ever Android smartphone, the HTC Dream, also known as the T-Mobile G1 (I loved mine!); as well as the Nexus One in 2010, the Nexus 9 tablet in 2014, and the first Pixel smartphone just last year,” said Rick Osterloh, Senior Vice President of Hardware at Google, in a blog post.
The transaction will be subjected to regulatory approvals and customary closing conditions, and is expected to close by early 2018.
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For Google, the deal supercharges its growing ambitions in the consumer hardware market. Last year, the company unveiled its first batch of “Made by Google” products, which includes Pixel smartphones, Google Home, Google Wifi, Daydream View and Chromecast Ultra. Osterloh said Google plans to unveil their second generation of products on October 4.
For HTC, Google’s investment comes as a critical moment as the Taiwanese company faces dire prospects in an increasingly competitive smartphone market. HTC once commanded more than 10 per cent of the global smartphone market, with more than US$30 billion in market value.; but that was six years ago.
Over the years, new entrants to the market, such as Xiaomi, Huawei, Oppo, OnePlus, have significantly undercut its market share. The competitors offered high performance with lower price points, making it hard for consumers to justify paying more for HTC’s flagship smartphones. To aggravate matters, HTC’s newer phones were not well received by critics either — partly due its lack of innovations.
More recently, HTC launched its foray into VR. But the VR space is not only nascent, some of HTC’s main VR competitors, Valve and Playstation, already have an established base of developers to build content for their platform — making it even more difficult for the electronic MNC to crack into the market.
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Image Credit: Google
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