Taiwanese smartphone maker HTC has announced that its “Powered by HTC” R&D division — the team behind Google’s Pixel and Pixel XL smartphones — will be purchased by Google for $1.1 billion in cash.
According to HTC’s CFO Peter Shen, this will mean about half of the 4,000 people in his company’s R&D team will be joining Google, but he emphasized that HTC will continue developing its own range of smartphones, including its next flagship product. The agreement also grants Google a non-exclusive license for a large part of HTC’s intellectual property (IP). The deal is expected to be approved and closed by early 2018.
“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,” HTC co-founder and CEO Cher Wang said in a statement.
“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,” Rick Osterloh, Google’s SVP of Hardware, wrote in a blog post.
The rumor mill went into overdrive yesterday after HTC announced that trading of its shares on the Taiwan Stock Exchange would be halted today pending a “major announcement.” The company swiftly added that, to debunk sale rumors, that it did not “comment on market rumor or speculation.”
By then, however, most of everyone had assumed that the long-standing flirtation between the two companies would finally finish. Unsubstantiated reports on Twitter claimed that the deal would see HTC’s manufacturing division become a part of the search engine, but the reality is that half of its R&D division will be joining Google instead. The two parties have yet to set a new work location for these employees, but Google said it will aim to bring minimal disruption to them. The remaining R&D team will focus on HTC’s own smartphone brand as well as VR technology.
In return, Google “will continue to have access to HTC’s IP to support the Pixel smartphone family,” according to HTC’s statement. Or in Osterloh’s own words, it’s “continuing our big bet on hardware,” which is fitting given his involvement with Google’s short-lived ownership of Motorola’s smartphone business.
— HTC (@htc) September 21, 2017
Much like the deal that cleaved Nokia’s hardware business from its parent company, the HTC name and brand will live on in both the smartphone and VR worlds.
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