HTC and Google reveal $1.1bn smartphone deal

HTC will continue to develop its own flagship smartphones and Vive ecosystem, but Google will now have access to HTC IP and more

After months of falling profits, HTC has announced a $1.1bn cooperation agreement with Google that will see a number of HTC employees join the search giant. What's more, Google will receive a non-exclusive licensing agreement for HTC IP.

Many of the HTC employees joining Google have already worked on the company's Pixel smartphones, the statement reads, and HTC will receive $1.1bn in cash from Google as part of the transaction. It's expected to close by early 2018 provided it gets approved.

That doesn't mean HTC is out of the smartphone game, however, but the manufacturer will be producing "a more streamlined product portfolio" that makes the company more efficient and financially flexible. Work on its next flagship smartphone will continue as planned, and HTC will also continue to build its virtual reality business through Vive. It will also continue to invest in augmented reality, AI and the Internet of Things.

On Google's side, the agreement represents its continued commitment to smartphones and overall investment in its emerging hardware business. It will also use HTC's IP to support its own family of Pixel smartphones. Whether this means we'll see greater support for Google's mobile virtual reality platform, Daydream, on future HTC smartphones remains to be seen, however.

As a pioneer of the smartphone market, we are very proud of our history of innovation. Our unmatched smartphone value chain, including our IP portfolio, and world-class talent and system integration capabilities, have supported Google in bolstering the Android market,” said Cher Wang, Chairwoman and CEO of HTC.

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.”

Rick Osterloh, senior vice president of hardware at Google added:HTC has been a longtime partner of Google and has created some of the most beautiful, premium devices on the market.

We're excited and can't wait to welcome members of the HTC team who will be joining Google to fuel further innovation and future product development in consumer hardware.”