Google is biting off a big piece of device manufacturer HTC for $1.1 billion to expand its efforts to build phones, speakers and other gadgets equipped with its arsenal of digital services.
The company is buying the HTC team that built the Pixel smartphone for Google in a cash deal, they said in a joint statement on Thursday.
Google is also getting a non-exclusive license for Taiwan-based HTC’s intellectual property to help support Pixel phones.
Although Android powers almost four out of every five smartphones in the world, but Google has never had the control that Apple has over iPhone and iOS. The open-source nature of Android has resulted in mobile brands like Samsung, LG having their own Android interface.
That fragmentation threatens to undercut Google's ability to increase the ad sales that bring in most of the revenue to its corporate parent, Alphabet Inc.
With this agreement, a team of HTC talent will join Google as part of the hardware organisation. These future fellow Googlers are amazing folks and we’ve already been working closely on the Pixel smartphone line, and we’re excited to see what we can do together as one team. The deal also includes a non-exclusive license for HTC intellectual property.Rick Osterloh, Vice President - Hardware, Google
The purchase is a gamble on several fronts for Google and Alphabet, but analysts have said that this deal is likely to be more successful than its Motorola deal.
HTC has been Google's partner since 2008, but its market share dramatically shrank in the last decade, even with its top-notch phones, as the company struggled to market and sell its devices.
Counterpoint’s data shows HTC’s market share at less than one percent in 2016, compared with nearly nine percent in 2011.
We’ll have to see if the latest hardware-centric purchase by Google delivers better results, in comparison to its previous dealing with Motorola Mobility.
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