Google strikes $1.1bn deal with HTC for Pixel talent

Posted September 21, 2017

The rumours were true. This partnership is clearly very important to Google, so Google just spent $1.1 billion in cash ensuring it continues.

It stops short of the rumoured takeover - in fact, Google and HTC will remain separate companies. Rick Osterloh, who led Motorola while it was part of Google, is now leading Google's hardware division.

After many predictions, HTC has finally announced that part of its R&D division, the team behind Google's Pixel and Pixel XL smartphones will be joining Google. Google said the takeover will strengthen its hardware business, including the Pixel smartphones on which HTC already cooperates. Therefore, the fresh agreement is considered to be a "testament" to the decade-long strategic relationship between the two companies.

Google isn't buying the whole company, however. The deal also comes with a non-exclusive licensing agreement for HTC intellectual property as per the report by Bloomberg. Many of those making the switch have previously worked with Google on the Pixel smartphone. This followed the previous announcement by the Taiwanese Stock Exchange that the smartphone and VR manufacturer's stock sales would be suspended, stirring the pot in terms of a potential deal being struck. This means that Google will have access to HTCs manufacturing patents and designs for its future Pixel devices.

"Objective of the new deal for Google is to strengthen its position in the premium segment".

Google has preferred HTC as its hardware partner since the first Android smartphone, called the HTC Dream, in September 2008. At the same time, Google receives engineers who will help to integrate smart phones Pixel software from the search giant.

In May this year, HTC recorded its eighth straight quarterly loss in Q1 of 2017.

Google has previous experience in the smartphone business, of course, having acquired the Motorola brand in 2011. This would bring it on par with Apple and Microsoft. Coomenting on the Google - Motorola Mobility partnership, then-Google CEO Larry Page, "Together, we will create awesome user experiences that supercharge the entire Android ecosystem for the benefit of consumers, partners and developers everywhere".