Google to buy part of HTC smartphone biz for USD 1.1 bn

Google today said it has signed a USD 1.1 billion-agreement with smartphone maker HTC under which a section of employees of the Taiwanese company will join the US-based tech giant.
The transaction will help Google strengthen its nascent hardware business, while helping HTC focus on enabling a more streamlined product portfolio, greater operational efficiency and financial flexibility.
The deal includes HTC employees who worked on Google's Pixel smartphone and intellectual property rights, the two companies said in a statement, without disclosing the number of staffers involved.
Google had introduced the Pixel and Pixel XL smartphones last year.
According to reports, the announcement will see about 2,000 HTC employees joining Google.

"HTC will receive USD 1.1 billion in cash from Google as part of the transaction. Separately, Google will receive a non-exclusive licence for HTC intellectual property (IP)," the statement said.

This is Google's second major foray into phone hardware after its acquisition of Motorola in 2012 for USD 12.5 billion. Two years later, Motorola was sold off to China's Lenovo Group for USD 2.9 billion.
"Google's intent in HTC is more to bring device capabilities in-house which is different from Moto's acquisition," Gartner Research Director Anshul Gupta told PTI.
Google is seriously getting into building some truly differentiated devices, be it smartphones, wearables or smart home devices, he added.

With strong capabilities in the area of augmented reality/virtual reality, artificial intelligence and computer vision, Google can build differentiated devices to compete in the market, Gupta pointed out.
Google's rival Apple has found success in the global smartphone business with its iPhone range. It recently unveiled the iPhone 8, iPhone 8 Plus and iPhone X, which will go on sale later this month.
Google is now believed to be working on introducing the second generation of Pixel next month as it looks to expand its hardware portfolio that includes Chromecast and Google Home speakers.
Previously, Google had partnered with various handset makers like LG and Motorola to introduce its Nexus range of smartphones.

Cher Wang, the Chairwoman and CEO of HTC, said the agreement will enable Google to supercharge their hardware business while ensuring continued innovation within HTC's smartphone and VIVE virtual reality businesses.
"We believe HTC is well positioned to maintain our rich legacy of innovation and realize the potential of a new generation of connected products and services," she added.
The transaction, which is subject to regulatory approvals and customary closing conditions, is expected to close by early 2018.
HTC has been a longtime partner of Google and has created some of the most beautiful, premium devices on the market, Rick Osterloh, Senior Vice President of Hardware at Google said.

Both Google and HTC have significant presence in the country.