Yesterday we saw HTC announce that they were halting trading of their shares pending an announcement today. Google’s Senior Vice President of Hardware, Rick Osterloh, has just made that announcement.
Today’s announcement has been made via the Google Blog and in it Rick Osterloh first discusses Google’s recent push into hardware manufacturing and the unveiling of their second generation products (yes, expect more than just Pixel phones) on October 4. Google thus have decided to invest in hardware manufacturing to allow the company more control over hardware under its brand in the future.
The new agreement with HTC is a partnership will result in “a team of HTC talent” joining Google as part of the hardware division. These new Googlers have previously worked with Google on the Pixel smartphone line. As well, the agreement includes a “non-exclusive license for HTC intellectual property” — all at a cost of a cool $1.1 billion. With HTC apparently valued at around $1.9 billion you would expect Google will have quite a say in what they can do at HTC and their manufacturing plants.
**UPDATE**
Google have released a statement and in it declare what this agreement means for HTC:
This agreement also supports HTC’s continued branded smartphone strategy, enabling a more streamlined product portfolio, greater operational efficiency, and financial flexibility. HTC will continue to have best-in-class engineering talent, which is currently working on the next flagship phone, following the successful launch of the HTC U11 earlier this year. HTC will also continue to build the virtual reality ecosystem to grow its VIVE business, while investing in other next-generation technologies, including the Internet of Things, augmented reality and artificial intelligence.
HTC CEO and Chairwoman, Cher Wang has said:
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.
The statement by Google and Mr Osterloh do not mention whether all Pixel phones and other hardware will now be made by HTC exclusively and absent of this detail we would assume no.
Much is still unknown, but one thing is for sure: Google are betting big on hardware (as Rick put it) and are putting money where the mouth is, bringing in talent to enable that bet to payoff in the future. More details will definitely come to light in the near future and we will fill in the blanks as we hear and see them.
What do you think of this partnership? What do you read into it?
HTC have always made pretty good devices with Google, with the one exception of the N9 (still use mine daily though). Hopefully this will continue forward. I love the Pixel.
One thing that had crossed my mind with this was how HTC and Apples cross-license agreement (following the lawsuits years back).
Its probably not included as part of the HTC’s IP and that this is a partnership not buy out.
Hopefully this works out better than what happened with Motorola.