So, Google’s not actually buying HTC after all
But it is spending $1.1 billion on HTC talent and patents.
One of the hottest recent rumours doing the rounds in the mobile space of late was that Google was going to buy HTC's mobile business, leaving the Taiwanese manufacturer in the fitness and virtual reality business. That hype was intensified when HTC called a brief stop in trading of its shares this morning, which led many to suspect that the deal was on.
Well, it turns out there was a deal, but it's not quite Google buying HTC's mobile business.
Instead, Google is investing $US1.1 billion in a "cooperation agreement" that will see "certain HTC employees" joining Google itself as well as a quantity of HTC's intellectual property being non-exclusively licensed to Google.
Which is all well and good if you're keen on the financial pages of news web sites, but what will this mean in terms of actual handsets and hardware?
In a blog post, Google's Rick Osterloh, states that it's all part of Google's "Big bet on hardware":
"We’re excited about the 2017 lineup, but even more inspired by what’s in store over the next five, 10, even 20 years. Creating beautiful products that people rely on every single day is a journey, and we are investing for the long run." Osterloh said.
"That’s why we’ve signed an agreement with HTC, a leader in consumer electronics, that will fuel even more product innovation in the years ahead. With this agreement, a team of HTC talent will join Google as part of the hardware organization. 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."
Osterloh was previously part of the Motorola team that Google purchased when it bought its last mobile business from Motorola before Google sold that team on to Lenovo. It's a fair bet that this means that next year's Pixel phones will either be HTC built or at least led by a team of former HTC employees.
HTC is already tipped as the manufacturer behind the upcoming Pixel 2 smartphone, and both the Pixel 2 and Pixel 2 XL are rumoured to feature the same squeezable sides "Edge Sense" technology as HTC's existing HTC U11, so it's quite likely that the tech behind that is part of the IP portfolio that Google is paying so much money for.
Some had tipped that HTC would use the opportunity to exit the smartphone space, but the announcement today suggests that it will still continue to produce its own hardware in the future.
HTC Chair and CEO, Cher Wang, said in a statement that "This agreement is a brilliant next step in our longstanding partnership, enabling Google to supercharge their hardware business while ensuring continued innovation within our HTC 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."
Which could be a graceful exit from the smartphone business in one sense, but more realistically points to HTC realising some value from staff and patents it held while still keeping a foothold in the mobile business as a whole.
Details of the HTC-produced Pixel 2 have already extensively leaked online, including the expected colours and price points ahead of Google's formal reveal of the new handsets on 4 October.