The R & D section of HTC, behind the Google Pixel smartphones, will be bought for $ 1.1 billion by Google.
After weeks of rumors and speculation, HTC announced Wednesday that its share price would be suspended for a “major announcement”, the scenario of a takeover by Google is finally confirmed.
More specifically, the “Powered by HTC” R & D section, the team behind the Google Pixel and Google Pixel XL smartphones, is bought by Google for $ 1.1 billion. According to Peter Shen, chief financial officer at HTC, half of the 4,000 employees of HTC’s R & D division will join Google. Moreover, under the terms of the agreement, Google would have a non-exclusive license on a large part of HTC’s intellectual property.
A win-win deal?
“This agreement is a tremendous step forward in our long-term partnership, enabling Google to boost its hardware section while ensuring continued innovation in our HTC smartphones and Vivid Virtual Reality activities,” said the co-founder and CEO of HTC, Cher Wang.
This agreement, which should be approved and concluded in early 2018, also allows HTC to raise its head. Indeed, despite some commercial successes, like the HTC U11, the Taiwanese firm was selling at a loss and would not have held out very long without external help.
The State of HTC after the Buyout
HTC will make smartphones and virtual reality even after its deal with Google.
According to TechCrunch, HTC will continue to make smartphones (including those of its higher “U” range) as well as virtual reality (HTC sells the HTC Vive headset), even after finalizing the deal with Google.
The two companies will compete, but for Rick Osterloh, Vice President in charge of hardware at Google, “there is more room for cooperation than for competition” between the two parties. Indeed, according to him, Google and HTC operate in different geographical locations.
As for virtual reality, HTC will also continue to develop virtual reality helmets. And if Google has nothing to announce at the moment about virtual reality, Rick Osterloh has however mentioned possible collaborations in this field. As a reminder, Google is developing the Daydream platform, which other manufacturers can use to propel their virtual reality headsets.
We look forward to a brighter future in this collaboration though.
But what do you think will happen to HTC? Will it operate normally? Will there be bigger issues? We would like to hear from you.