Google Acquires HTC | Full Details About the 1.1 Billion Dollar Agreement

The news going the round now is how Google has acquired HTC. But have they really acquired the HTC Company? To answer that, you will have to keep your head up, read through this article to get yourself acquainted. HTC has been an acquaintance of Google for quite some time now. A lot of people do not know this, but they have been helping Google work on the design of their Google branded pixel phones. You are Surprised, Right? Google has now decided to add a hardware team to their company, by acquiring the division of HTC which has been helping Google out on their design of phones.

google acquires htc

So, it is not quite what people are expecting. Google and HTC have only signed an agreement to send some of its employees over to Google. In this deal, HTC gets $1.1 billion cash infusion and Google gets a non-exclusive license for HTC ‘s intellectual property.

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What is Google Up to?

Rumors that were going the round earlier pointed an outright acquisition of HTC by Google. But it has been confirmed that HTC remains an independent company and will still engage in the manufacturing of smartphones. Google is reported to have acquired 2000 HTC employees but not any of HTC’s factories.

This deal between HTC and Google was announced by Google’s senior vice president of hardware and former CEO, Rick Osterloh. He is said to have indicated in a blog post, “With this agreement, a group of HTC employees will be joining Google as part of the hardware organization. These future fellow Googlers are amazing folks we have already been working with closely on the pixel Smartphone line. and we are excited to see what we can do together as one team”. He also said, “HTC has been a long time and has created some of the most beautiful high-end devices on the market. We can’t wait to welcome the members of HTC team to join on this journey”.

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Google and HTC have been good partners in the design of notable devices. Including the original pixel phone of last year and upcoming pixel phone of 2017, the Nexus 9 tablet from 2014, the nexus one from 2010, the T-Mobile G1, and even the first ever android phone. Most of the HTC employees being acquired by Google are veterans of the pixel team. This will afford Google the opportunity to design much more sophisticated smartphones that are more differentiated from the competition.

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The Google-branded pixel phones of today have secret manufacturers that have greatly influenced the design of those phones. For example, the 2016 pixel and pixel XL is said to have been manufactured by HTC. Also, the 2017 pixel, which will have launched on October 4, is said to have been manufactured by the collective effort of Google and HTC. The larger version of is made by Google and the smaller version is made by HTC. So, Google does not do as much engineering work on the pixel phones as it will like you to believe. Probably, with the new acquisition, they will able to do much.

An in-house hardware team will help Google’s design be as independent as it could be. This will also help to realize some of their bigger hardware ambitions, which includes things like building machine learning co-processors, called” tensor processing units” into phones and making its own SoCs.

Google might not be acquiring any manufacturing assets, but their deal with HTC sheds light on their ambition to venture more in Android smartphones, particularly at a time when the consumer and media’s attention is directed towards rival Apple Inc.

Mia Huang, an analyst at research firm Trendforce said, “Google has found it necessary to have its own hardware team to help bring innovations to Android devices, making them more competitive versus the iPhone series

It is hoped that Google will treat the new team a lot better than they treated Motorola, which it acquired in 2011 and subsequently sold to Lenovo in 2014. Although, there is a lot to be optimistic about: unlike those years, Google now has a lot of interest in hardware game:  the Google home speaker, chrome cast streaming device, chrome books, and VR headset. Therefore, having additional talents in the company would prove to be a lot handy.

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What is Next for HTC?

A lot of people might be thinking this is the end of this Taiwanese firm. Well, it does not hurt to think so. As for HTC, the deal they have made with Google will allow them to narrow their concentration on its virtual reality phones. while also reducing development cost.

The HTC’s chief financial officer, Peter Shen, is said to have told a news conference in Taipei that the deal will lead to a sizeable reduction in R&D expenses. “Overall, it should be in the ballpark of 30% – 40% reduction in operating expenses,” he revealed.

The HTC claims it will still be around in the future and will continue to have best in class engineering talent, which is currently working on the next world-class flagship phones. HTC claims that they will be using the $1.1 billion cash infusion they get, as a result of the agreement they have with Google, to continue competing in the Smartphone and VR hardware market.

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However, a sharp cut down of HTC’S mainstay operation has cast some doubt about the long-time future of the company.

Jake Saunders, an analyst at ABI research in Singapore said HTC can design and produce innovative products. But it lacks the deep pockets of the likes of Samsung for marketing promotions and saturation advertising. “Competitors in form of Huawei, ZTE, Oppo, and Xiaomi are snapping at HTC heels,” He claimed.

Conclusion

The deal between HTC and Google is now official. Unlike the popular thoughts of Google acquiring the HTC company, Google has only acquired part of HTC’s hardware team. Which mostly have been working with Google through the years, on Google’s branded phones.

So, keep calm, for HTC is still an independent company and will still be involved in the design and manufacture smartphones.