Google's getting into the phone hardware business. Properly. It's just signed an agreement with HTC to poach some top smartphone development employees from the Taiwanese phone-maker, as well as to license some of its intellectual property. The deal is said to be worth $US1.1 billion, and will give Google the tools it needs to step up to the plate against Apple when it comes to making a vertically integrated smartphone: everything from the hardware inside it to the software that runs on it.
We're excited to welcome some new talent to Google: announcing an agreement with HTC. https://t.co/4YrDP4XJ6s
— Google (@Google) September 21, 2017
Google and HTC worked together on the original Pixel smartphone as well as older gadgets like the Nexus 9 tablet, but this move brings key HTC talent in-house, as Google said in a statement on its blog: "These future fellow Googlers are amazing folks we’ve already been working with closely on the Pixel smartphone line, and we're excited to see what we can do together as one team."
The $US1.1 billion size of this deal pales in comparison with the roughly $US12.5 billion that Google spent to buy Motorola's Mobility division in 2011, but that's because it's not a complete buyout: HTC will continue to build its own phones, although it's likely to focus its expertise on the Vive virtual reality headset and grow that nascent VR business into the future.
The deal also includes "non-exclusive" intellectual property licences for HTC's suite of patents and other related smartphone hardware and software tech, which will be crucial for Google to avoid any potential finicky Apple-Samsung lawsuits as it builds out its hardware portfolio in the future. There's a lot that Google could do with this expertise, but it's clear that bringing the best bits of HTC inside the company will give Google the leg up it needs to get started.
Again from Google: "It’s still early days for Google’s hardware business. We’re focused on building our core capabilities, while creating a portfolio of products that offers people a unique yet delightful experience only made possible by bringing together the best of Google software—like the Google Assistant—with thoughtfully designed hardware. HTC has been a longtime partner and has created some of the most beautiful, high-end devices on the market. We can't wait to welcome members of the HTC team to join us on this journey." [Google]