Google buys HTC's smartphone brains for $1.1 billion to bolster its hardware push

Google isn't buying HTC outright, but it's scooping up the talent behind the Pixel phones.

Credit: Adam Patrick Murray/IDG

Nearly four years after selling Motorola off to Lenovo, Google is buying into yet another longtime Android partner. But instead of purchasing HTC outright, Google is buying its brains.

“A team of HTC talent will join Google as part of the hardware organization,” Google hardware SVP (and former Motorola president) Rick Osterloh said Thursday. “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.” Google also gets non-exclusive rights to HTC intellectual property as part of the deal. Somewhat surprisingly, the agreement doesn’t include any of HTC’s manufacturing capabilities.

The story behind the story: The deal signifies that Google is taking its new hardware division and “Made by Google” device push seriously. It also shows lessons learned from the failed Motorola acquisition.

When Google bought Motorola in 2011, it took nearly two years of flushing ho-hum hardware through the company’s pipeline before Google was able to truly make its mark with 2013’s brilliant Moto X. By snapping up a large chunk of HTC’s smartphone team, Google can sidestep HTC’s existing pipeline baggage and allow the fresh hires to start working on the Pixel 3 and other devices immediately. (The Pixel 2 is expected to launch at Google’s October 4 hardware event.)

Why Google bought HTC’s brains

Google obviously bought HTC’s engineering talent to improve its hardware chops. Until now, Google has had to partner with device makers like Huawei, LG, and yes, HTC itself to create its self-branded Nexus and Pixel phones. This deal lets Google seize more direct control over its hardware endeavors, though it will still need secure manufacturing for its devices. It wouldn’t be surprising if the deal included some HTC Vive talent as well, given Google’s interest in mobile VR.

HTC’s mobile team has a long history with Android. It also boasts a solid track record for producing flat-out excellent phones and tablets, often in direct collaboration with Google.

The HTC Dream (AKA the T-Mobile G1) was the world's first Android phone in 2008. It was a touchscreen device with a slide-out QWERTY keyboard. HTC also made the first Nexus One phone and the last Nexus 9 tablet. It also manufacturers Google’s Pixel and Pixel XL and is rumored to be the manufacturer of the forthcoming Pixel 2.

But HTC has struggled to gain much traction in recent years. It was once the darling of the Android community with the industrial HTC One and a long line of top-notch phones packing Beats Audio prior to Apple’s Beats acquisition, but has since slipped under intense competition from Samsung, Huawei, and others. HTC overhauled its smartphone lineup this year with new U branding and mirror-like "liquid" surface, but despite a strong showing by the stunning, squeezable U11, HTC is now a bit player in the Android world.

Now, however, the brains behind those steller devices now work for Google, which is clearly looking to break into hardware in a big way. Watch out, Samsung.

What happens to HTC now?

HTC says it “will continue to have best-in-class engineering talent,” and those people are working on a successor to the HTC U11. Exact figures weren’t provided, but the New York Times reports that HTC CFO Peter Shen stated that the company would still have more than 2,000 research and design staffers after Google’s acquihire, compared to the roughly 4,000 people currently employed.

The company also says the $1.1 billion deal will enable “a more streamlined product portfolio,” which makes you wonder how prominent HTC’s mobile lineup will remain after that. HTC’s phone business pretty much cratered out over the past few years, with the company announcing its ninth straight quarterly loss in August 2017. I wouldn’t be surprised to see HTC’s future smartphone role evolve into something similar to BlackBerry and Nokia’s current strategy: Licensing its name out for use on hardware created by designed and produced by third party manufacturers.

htc u11 main Adam Patrick Murray/IDG

It sounds like HTC is doubling down on its Vive VR headset business as well. “Today’s news enables #TeamHTC to continue investing, innovating & leading in emerging tech, including #IoT #VR #AR #AI @HTCvive,” the company said in a tweet.

The Vive ($599 on Amazon) is currently the best PC-based VR headset available, and trademarks suggest a standalone “Vive Focus” headset may also be on the way. The Focus is expected to be powered by Qualcomm hardware and Google’s Daydream VR software, according to UploadVR, with six degrees of freedom (6DOF) positional tracking similar to what you find in the PC-based Vive and Oculus Rift.

Join the newsletter!

Error: Please check your email address.
Rocket to Success - Your 10 Tips for Smarter ERP System Selection

Tags Googlehtc

Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Brad Chacos, Michael Simon

PC World (US online)
Show Comments

Cool Tech

SanDisk MicroSDXC™ for Nintendo® Switch™

Learn more >

Breitling Superocean Heritage Chronographe 44

Learn more >

Toys for Boys

Family Friendly

Panasonic 4K UHD Blu-Ray Player and Full HD Recorder with Netflix - UBT1GL-K

Learn more >

Stocking Stuffer

Razer DeathAdder Expert Ergonomic Gaming Mouse

Learn more >

Christmas Gift Guide

Click for more ›

Most Popular Reviews

Latest Articles

Resources

PCW Evaluation Team

Edwina Hargreaves

WD My Cloud Home

I would recommend this device for families and small businesses who want one safe place to store all their important digital content and a way to easily share it with friends, family, business partners, or customers.

Walid Mikhael

Brother QL-820NWB Professional Label Printer

It’s easy to set up, it’s compact and quiet when printing and to top if off, the print quality is excellent. This is hands down the best printer I’ve used for printing labels.

Ben Ramsden

Sharp PN-40TC1 Huddle Board

Brainstorming, innovation, problem solving, and negotiation have all become much more productive and valuable if people can easily collaborate in real time with minimal friction.

Sarah Ieroianni

Brother QL-820NWB Professional Label Printer

The print quality also does not disappoint, it’s clear, bold, doesn’t smudge and the text is perfectly sized.

Ratchada Dunn

Sharp PN-40TC1 Huddle Board

The Huddle Board’s built in program; Sharp Touch Viewing software allows us to easily manipulate and edit our documents (jpegs and PDFs) all at the same time on the dashboard.

George Khoury

Sharp PN-40TC1 Huddle Board

The biggest perks for me would be that it comes with easy to use and comprehensive programs that make the collaboration process a whole lot more intuitive and organic

Featured Content

Latest Jobs

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?