Google has acquired a part of hardware manufacturer HTC at a price of $1.1 billion as the tech giant ramps up efforts to build speakers, smartphones and other devices. The cash deal will see HTC’s engineering team, which was responsible for building Google’s Pixel smartphone, move to the search giant.
And to aid the development of Pixel phones, the deal will also see Google get a non-exclusive license to use HTC’s intellectual property. The deal comes at a time when tech firms are competing against each other in their bid to become technological hubs in the lives of consumers.
“We think this is a very important step for Google in our hardware efforts. We’ve been focusing on building our core capabilities. But with this agreement, we’re taking a very large leap forward,” said the hardware senior vice president at Google, Rick Osterloh, during a press conference held in Taipei, Taiwan.
The deal is expected to be concluded by early next year once regulatory approval is received. According to the chief financial officer of HTC, Peter Shen, the number of engineers that will move to Google will be 2,000 with their area of focus being research and development.
Previously Google was content to offer its Android OS to device makers as a way of ensuring people around the world would continue to use its YouTube video service, maps, email, search engine and other applications on mobile devices as well as other gadgets. That strategy was overhauled in 2016 as the Mountain View, California-based tech giant unveiled its own smart speaker and a smartphone. The smart speaker comes with a voice assistant known as Google Assistant.
Despite the fact that Android is present in approximately 80% of the world’s smartphones as well as other mobile devices, alterations can be made to the software resulting in the services that Google offers being disabled or de-emphasized. This poses a threat to the ability of the search giant to raise ad sales at a time when people are spending more time on mobile devices and less on personal computers.
Google could also be borrowing a leaf from Apple’s playbook. The iPhone has proved popular among consumers who are considered affluent and thus more valuable to advertisers. Google thus wants to build its own high-end smartphone not just to grow hardware sales but to offer an additional platform for ads.