Google in $1.1 billion HTC deal

Google signed a deal with Taiwanese smartphone maker HTC. While the agreement won’t net Google any shares in the business, it gives the tech giant the opportunity to claim and develop more digital hardware for its brand.

The deal is reported to be worth $1.1 billion and should complete early in 2018.

Google already produces the Android operating system used by around 80% of smartphones. This HTC deal, however, marks a step closer to entering the smartphone market in more material and permanent way.

The agreement with HTC will see around 2,000 HTC staff move to the Google offices. It follows Google’s recent new step into smartphone handset production with the pixel.

Production run numbers of the Google branded smartphone were small, but on the whole, the phone was well received. That phone was produced in partnership with HTC and its success undoubtedly paved the way for this next step.  

While the deal is being seen as a positive for Google, it’s also a boon for the smartphone manufacturer. The Taiwan smartphone company has struggled to keep pace with Apple and Samsung in the mobile world. An injection of funding and tech expertise could help change that current status quo.

HTC will continue to make its own phones at the same time as working with Google. This perhaps highlights that both businesses are keen to hold on to their own qualities and brands, while developing stronger ties and becoming a bigger force in the smartphone market.

The non-share partnership is also likely moving slowly due to Google’s past hardware disappointments. The company’s purchase of Motorola Mobility in 2011 didn’t end well and it was sold to Lenovo for just $2.9 billion in 2014. That represented a loss of almost $10 billion.

However, Google and HTC have a long working history. HTC produced the first smartphone with the Android operating system. The Google and HTC boards and shareholders are no doubt hoping this long running and steadily growing partnership, can help them achieve the success they both crave in the smartphone market.