Google announces $1.1B purchase of large part of HTC’s smartphone franchise

Google just announced  the completion of its $1.1 billion deal to buy a large slice of HTC’s hardware business.

The acquisition was announced back in September 2017, now it has passed the requisite approvals and is finalized. Beyond the transfer of over 2,000 engineers from HTC — that’s around one-fifth of HTC’s engineering team — Google will also receive a non-exclusive license for HTC’s intellectual property. HTC is retaining its Vive VR division and it will continue to make its own smartphones, the company confirmed last year.

Most obviously, the deal boosts Google’s hardware game significantly by handing a portion of HTC’s own smartphone development team, many of whom worked on Google’s Pixel hardware (which was outsourced to HTC) and other HTC devices which, while much lauded, didn’t sell in huge volumes.

Secondly, it gives Google a vast new engineering base in Taipei, Taiwan, where HTC is located. That makes the location the largest engineering site for Google in Asia Pacific, and it is likely to be the source of new products from the company going forward.

“I’m delighted that we’ve officially closed our deal with HTC, and are welcoming an incredibly talented team to work on even better and more innovative products in the years to come,” Rick Osterloh, Google’s senior VP of hardware, wrote in a blog post.

“These new colleagues bring decades of experience achieving a series of “firsts” particularly in the smartphone industry—including bringing to market the first 3G smartphone in 2005, the first touch-centric phone in 2007, and the first all-metal unibody phone in 2013,” Osterloh added.

The closure of the deal marks another notable development for Google’s business in Asia in recent months.

The company announced plans to open an AI lab in Beijing, its first such location in China, while it is also opening a base in Shenzhen, the Chinese city seen as the world’s ‘Silicon Valley of hardware.’ Google has also turned investor, putting money into Chinese streaming service Chushou, U.S.-Chinese biotech firm XtalPi, which uses AI and machine learning to help design drugs, and Indonesian ride-hailing service Go-Jek.

It has also struck a key alliance with Tencent, the $500 billion Chinese giant making moves in the U.S. and other global markets, after the duo agreed to a broad patent licensing deal.