Google in $1.1 BN smartphone deal with HTC

Google, on Thursday, announced it will acquire HTC Corp’s smartphone division for $1.1 billion in an all-cash deal. Of the 2,000 HTC employees that will move to Google, many have worked on the Google's Pixel phone.

Google will also acquire a non-exclusive license for HTC’s intellectual property and the two firms have agreed to look at other areas of collaboration in future.

“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 realise the potential of a new generation of connected products and service,” HTC CEO Cher Wang was quoted as saying in a release.

HTC will remain an independent company and said it was already “actively preparing” for its next flagship smartphone. It will 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.

For Google, the deal reinforces its commitment to smartphones and overall investment in its emerging hardware business. In addition to the team, Google will also have access to HTC’s IP to support the Pixel smartphone family. Additionally, the agreement also represents a significant investment by Google in Taiwan as a key innovation and technology hub.

Google took charge of hardware development last year with the debut of its Pixel and Pixel XL smartphones, Google Home, and Google Wifi. HTC manufactured both Pixel smartphones, which were designed by Google and marketed as Google devices.

This is the second time that Google has made a big acquisition involving a smartphone manufacturer. In 2011, it had announced a $12.5 billion buyout of Motorola Mobility.