Google confirms buyout of HTC's Pixel team for $1.1bn

The money will pay for around 2,000 of HTC's staff and intellectual property

Google has confirmed it is acquiring parts of HTC in a deal said to be worth $1.1billion (815,600).

Speculation began about a potential merger earlier in the year and heightened yesterday amid reports HTC would be halting the trading of its shares today, 21 September, ahead of a major announcement.

These reports originated from Bloomberg's Tim Culpan as he tweeted out the news he had reportedly been fed by the company.

In a blog post announcing the acquisition, senior vice president Rick Osterloh wrote: "We've signed an agreement with HTC, a leader in consumer electronics, that will fuel even more product innovation in the years ahead. With this agreement, a team of HTC talent will join Google as part of the hardware organisation.

Advertisement
Advertisement - Article continues below
Advertisement - Article continues below

"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. In many ways, this agreement is a testament to the decade-long history of teamwork between HTC and Google."

Google isn't buying the whole company, however. The tech giant has acquired HTC's Pixel smartphone unit which will see 2,000 people joining Google from HTC and give Google a non-exclusive license to HTC's intellectual property.

HTC will continue to produce its own branded smartphones as well as invest in its HTC Vive virtual reality technology. HTC's VR business as HTC Vive operates as a completely separate company to its smartphone arm.

The news comes just days before Google is due to unveil its next range of devices, rumoured to be Pixel phones, a mini Google Home and new laptops.

Up til now, Google and HTC have had a good relationship. Not only did HTC build one of the first Android phones on the market, the HTC Dream, it also created the first Google Nexus device in 2010, the Nexus 9 tablet in 2014, along with manufacturing last year's Google Pixel and Pixel XL. Rumours around the Pixel 2 also suggest HTC is involved with its production.

HTC is likely selling its floundering smartphone arm after its fortunes began to take a turn over the last year. Despite the HTC U11 receiving positive reviews -- including a five-star Recommended from our sister site Alphr -- HTC still saw a sharp decline in unit sales. According to DigiTimes, HTC brought in $99.7 million in August, a decline of 51.5% from July 2017 and 54.4% year on year against August 2016.

Advertisement - Article continues below

Google has previous experience in the smartphone business, of course, having acquired the Motorola brand in 2011. The company then sold off its mobile arm in 2014 to Chinese OEM Lenovo and analysts believe this earlier acquisition was more about Google getting access to Motorola's IP amid various legal challenges in the industry than buying the hardware to sell itself.

One big draw for Google is HTC's manufacturing capabilities, allowing Google to produce and manufacture all of its products in-house. This would bring it on par with Apple and Microsoft. Currently, Google awards projects to third-party manufacturers, who then do all the leg work in conjunction with the company.

Featured Resources

What you need to know about migrating to SAP S/4HANA

Factors to assess how and when to begin migration

Download now

Your enterprise cloud solutions guide

Infrastructure designed to meet your company's IT needs for next-generation cloud applications

Download now

Testing for compliance just became easier

How you can use technology to ensure compliance in your organisation

Download now

Best practices for implementing security awareness training

How to develop a security awareness programme that will actually change behaviour

Download now
Advertisement

Recommended

Visit/cloud/cloud-computing/354479/google-adds-partners-to-real-time-translation-tools
cloud computing

Google adds partners to real-time translation tools

8 Jan 2020
Visit/hardware/354336/the-it-pro-products-of-the-year-2019-all-the-years-best-hardware
Hardware

The IT Pro Products of the Year 2019: All the year’s best hardware

24 Dec 2019
Visit/marketing-comms/search-engine-optimization-seo/354339/google-is-getting-worse-as-it-does-more
search engine optimization (SEO)

Google is getting worse as it does more

21 Dec 2019
Visit/cloud/354231/the-it-pro-podcast-is-the-future-multi-cloud
Cloud

The IT Pro Podcast: Is the future multi-cloud?

29 Nov 2019

Most Popular

Visit/policy-legislation/data-governance/354496/brexit-security-talks-under-threat-after-uk-accused-of
data governance

Brexit security talks under threat after UK accused of illegally copying Schengen data

10 Jan 2020
Visit/microsoft-windows/32066/what-to-do-if-youre-still-running-windows-7
Microsoft Windows

What to do if you're still running Windows 7

14 Jan 2020
Visit/operating-systems/microsoft-windows/354526/memes-and-viking-funerals-the-internet-reacts-to-the
Microsoft Windows

Memes and Viking funerals: The internet reacts to the death of Windows 7

14 Jan 2020
Visit/network-internet/broadband/354530/openreach-offers-free-full-fibre-installation-for-thousands-of
broadband

Openreach offers free full-fibre installation for thousands of homes

14 Jan 2020