Google acquires HTC team in $1.1 billion agreement to beef up hardware division (GOOG, GOOGL)

Google has signed a $1.1 billion dollar cooperation agreement with HTC, the technology company said in a statement on Thursday, after trading of HTC shares were halted on Taiwan’s stock exchange before the announcement.

The move, first rumored earlier this month and then re-emerged this week, is the search giant’s latest attempt to juice up its growing hardware division.

Google hardware exec Rick Osterloh said in a statement: “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,” Osterloh said, adding that the deal includes a non-exclusive license for HTC intellectual property.

This isn’t the first time Google’s took a stake in a smartphone manufacturer, and it isn’t clear why it will be successful this time round.

In 2011, Google bought Motorola in a $12.5 billion deal, only to resell it to Lenovo for $2.91 billion three years later (Google had sold off other parts of Motorola earlier).

At the time, Google said it deemed the overall operation to be a “success,” as it retained Motorola’s most valuable asset, its patent portfolio.

Lately, Google has shown signs of taking an Apple-like strategy towards its products. With its new devices, it’s taking care of both Android, the software, as well as the hardware.

In April 2016, the search giant hired Rick Osterloh, ex-Motorola chief operating officer, as its first ever hardware czar, and formally put together a hardware team under his leadership.

That resulted in the first-ever solely-Google-branded phone, the Pixel (as well as the larger Pixel XL), and also the Daydream View virtual reality headset. Earlier this year, the Google Home smart speaker followed.

What’s more, is that Google is rumoured to be entering the chip-manufacturing space, to compete even better with deeply integrated systems like Apple’s iPhone without having to rely on third party companies like Qualcomm.

When the first batch of made-by-Google devices was unveiled, Osterloh said that hardware was an important component of the tech titan’s business, and that they would be in it “for the long run.” The acquisition of HTC looks like further proof of this commitment.

Notably, HTC also acted as the “ghost” manufacturer for both Pixel handsets last year, and is tipped to be once again as the company behind the forthcoming “Pixel 2” (with LG reportedly taking care of the larger, higher-end “Pixel 2 XL” instead).

In addition to a refreshed phone lineup, a new Pixel-branded Chromebook is also expected to make its debut at Google’s dedicated event, taking place on October 4.

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