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Google acquires part of HTC's smartphone business for $1.1 billion

By Shawn Knight ยท 14 replies
Sep 20, 2017
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  1. Google and HTC have officialized a deal under which a portion of HTC employees, many of whom were already working with Google developing Pixel phones, will join Google. As part of the agreement, HTC will receive US$1.1 billion in cash from Google. Conversely, the search giant and Android developer will receive a non-exclusive license for HTC intellectual property.

    HTC will continue to operate its smartphone business separately, which according to the company has a team of engineers currently working on their next flagship phone to follow the HTC U11, which we recently reviewed and praised. HTC will also continue to work on Vive VR, Internet of Things, augmented reality and artificial intelligence, all of which will remain independent to the Google deal.

    For Google, it's clear they are furthering their commitment to phone hardware and a decisive move following last year's launch of "Made by Google" products, evidenced by the shift from more barebones Nexus offerings to the Google Pixel and Pixel XL smartphones.

    Google and HTC are no strangers as the two companies have collaborated on multiple occasions. The search giant commissioned HTC to build its first-gen Pixel smartphones. A recent FCC filing indicates that HTC is also manufacturing the smaller Pixel 2 (the XL variant is reportedly being developed by LG). Acquiring a hardware specialist like HTC seems like a smart move but we have to remember, Google has been down this road before and it didn’t necessarily end well.

    Pixel 2 in blue, Pixel 2 XL in white and black (Droidlife)

    In mid-2011, Google purchased Motorola’s mobile unit for $12.5 billion. Less than two years later, Google sold the division to Lenovo for a mere $2.91 billion, although it kept the entire Motorola Mobility patent portfolio which was likely the key reason Google wanted to buy Motorola in the first place.

    In 2016, former Motorola president Rick Osterloh rejoined Google and was put in charge of a new hardware division. “HTC has been a longtime partner of Google and has created some of the most beautiful, premium devices on the market,” said Rick Osterloh, Senior Vice President of Hardware at Google. “We're excited and can't wait to welcome members of the HTC team who will be joining Google to fuel further innovation and future product development in consumer hardware.”

    The transaction is subject to regulatory approvals and is expected to close by early 2018.

    HTC to suspend trading of its shares ahead of major announcement

    Google’s acquisition of HTC is nearly ready for primetime. On Wednesday, the Taiwan Stock Exchange announced that trading of shares in the company will come to a halt on September 21 “pending the release of material information.”

    Rumors emerged earlier this month that Google was in the final stages of negotiating a deal to purchase HTC. Exactly what the deal entails, however, isn’t yet known. Some have speculated that Google is only interested in select aspects of the business – perhaps the Vive VR division or the mobile sector. A full takeover of the entire company seems a bit less likely but still plausible.

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    Last edited by a moderator: Sep 21, 2017
  2. Uncle Al

    Uncle Al TS Evangelist Posts: 3,086   +1,773

    Thus the old business strategy .... if you can't beat them, buy them!
     
  3. Kenrick

    Kenrick TS Evangelist Posts: 476   +303

    Rip HTC. If it will be my way, I prefer if other than google will buy HTC. Google is not good in managing hardware stuffs.
     
  4. OortCloud

    OortCloud TS Booster Posts: 146   +44

    'Officialized' - apparently it is now considered a word. A lovely example of vapid corporate new-speak.
     
    Skidmarksdeluxe and Bubbajim like this.
  5. tomkaten

    tomkaten TS Maniac Posts: 219   +135

    Another amazing deal by Google ? They bought Motorola Mobile for 12.5 billion and sold it for 2.91 a few years later.

    They'll probably sell HTC's Mobile Division for 10 bucks in a few years.
     
    oranuro likes this.
  6. McMurdeR

    McMurdeR TS Enthusiast Posts: 36   +22

    Hard to work out what Google are up to. Pixel prices are way too high for a brand that hasn't made significant market penetration, and there are questions around weather HTC still has the capability to develope cutting edge hardware.
     
  7. dirtyferret

    dirtyferret TS Guru Posts: 297   +296

    Develope hardware? Other then Samsung and LG what cell phone company develops hardware? The screens come from LG and Samsung. The RAM from Samsung and Micron. The chips from Qualcomm or Intel, etc., etc.,.
     
    MoeJoe likes this.
  8. amghwk

    amghwk TS Addict Posts: 181   +69

    Google becoming more and more powerful and buying off competition, is worrisome.

    With great power comes dictatorship.
     
  9. Uncle Al

    Uncle Al TS Evangelist Posts: 3,086   +1,773

    Considering their past, I would predict that HTC will be sold in less than 2 years for $99.95, before discounts .....
     
  10. Patrick Laramee

    Patrick Laramee TS Enthusiast Posts: 17   +21

    Motorola was a good deal, they kept all the patents. That was the reason to buy them in the first place.
     
    Skidmarksdeluxe and Julio Franco like this.
  11. Skidmarksdeluxe

    Skidmarksdeluxe TS Evangelist Posts: 8,461   +3,180

    From the outset it was clear. They no intention of hanging onto Motorola for a minute longer than they had to. They may have sold it for a 'pittance' but they made tons out of it. It's was a classic case of buy it, get what we can from it and when it's outlived it's usefulness, discard it in the trash. Google didn't get to where they are today by making silly business decisions.
     
  12. MilwaukeeMike

    MilwaukeeMike TS Evangelist Posts: 2,867   +1,203

    They aren't direct competitors. HTC made phones, Google has Android. HTC was working for Google making the Pixel phones, so the actual relationship was more of customer and manufacturer. Google wants to be in the hardware business and HTC is struggling to stay in it. This sounds like a win-win for them both. It's better than HTC just going under - and the logical thing for them to do if they can't compete is sell off their business.

    If Samsung had bought them it would be called buying up the competition.

    And if there aren't any competitors it's called a Monopoly - not a dictatorship.
     
    USAvenger likes this.
  13. oranuro

    oranuro TS Enthusiast Posts: 49   +13

    Sweet deal for Google if you ask me. Considering HTC is a Taiwanese company, they probably used tied-up untaxed overseas money to write the check.
     
  14. McMurdeR

    McMurdeR TS Enthusiast Posts: 36   +22

    Sure but it still takes considerable resources to design a cutting edge smartphone.
     
  15. amghwk

    amghwk TS Addict Posts: 181   +69

    Agreed, to your explanation.
     

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