Google agrees to buy part of HTC for $1.1 billion

On Thursday, Google announced it has signed a definitive agreement with Taiwanese Smartphone maker HTC, to bolster its hardware business.

Under the agreement, Google will acquire a team of HTC employees, many of whom have worked on its Pixel Smartphone who will join Google. In return to which HTC will receive US$1.1 Billion in cash. Also, Google will separately receive a non-exclusive license for HTC intellectual property.

The agreement is a testament to the decade, a long strategic relationship between HTC and Google around the development of premium Smartphone’s. The tie-up could further formalize Google’s ambition in the virtual mobile industry and at the same time rescue HTC’s drooping business. Also, the Google will continue to have access to HTC’s IP to support the Pixel Smartphone family.

Cher Wang the Chairwoman and CEO at HTC said, “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.”

According to a blog post, “The second generation of products are set to be unveiled on 4th October .”

Google Senior Vice President of Hardware, Rick Osterloh wrote “That’s why we’ve signed an agreement with HTC, a leader in consumer electronics, which will fuel even more product innovation in the years ahead.”

Taiwan based HTC once had as much as 10  percent of the smartphones market, according to estimates from Counterpoint Research. But despite a cult following, HTC’s market share has fallen since the end of 2011 to less than 2 percent. According to IDC estimates, HTC makes the high-end Vive virtual reality system. It’s the third most popular headset in terms of shipments and market share.

Google has indicated that making its own hardware,  from home speakers to phones, will be a continued focus as the company tries to specialize its software for advanced artificial intelligence and virtual reality. Those types of features require powerful phones, and HTC could help Google in making them.

 

By: Aviral Nigam

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