Alphabet subsidiary Google announced on Thursday that it signed a $1.1 billion cooperation agreement with Taiwanese smartphone maker HTC.
Under the agreement, Google will acquire a team of HTC employees, many of whom have worked with the company on its Pixel smartphone, as well as non-exclusive licenses to some of the Taiwanese company`s intellectual property to help bolster hardware efforts.
The move formalizes a long-awaited tie-up that could further Google`s ambitions in the mobile phone and virtual reality industries and may rescue HTC`s flagging business.
News of acquisition agreement comes after the Taiwan Stock Exchange said HTC`s stock had been halted, starting Sept. 21 local time, pending the release of "material information." Some reports speculated that a deal with Google would be announced, based on previous information from sources. (HTC and Alphabet both declined to comment to CNC at the time of those reports).
Taiwan-based HTC once had as much as 10 percent of the smartphone market, according to estimates from Counterpoint Research. But despite a cult following, HTC`s market share has fallen since the end of 2011 to less than 2 percent. While HTC doubled down in North America and Europe, battling the immense resources of Apple and Samsung, other Chinese brands took hold in emerging markets like India, leaving HTC without a market to fall back to, Counterpoint`s Neil Shah wrote in a blog post.
Google, however, has provided a lifeline for HTC over the past few years. HTC built some of Google`s Nexus tablets, and Google worked closely with HTC on the manufacturing and assembly of its first-ever end-to-end phone design, the Pixel.
Google has indicated that making its own hardware, from home speakers to phones, will be a continued focus as the company tries to specialize its software for advanced artificial intelligence and virtual reality. Those types of features require powerful phones, and HTC could help Google make them.
Further, HTC makes the high-end Vive virtual reality system. It`s the third-most-popular headset in terms of shipments and market share, according to IDC estimates, which means that it likely has a strong base of app developers that could help Google compete with rivals like Samsung, Sony and Facebook.
Nonetheless, Google would inherit a company in dire straits — a Bernstein analyst reportedly suggested that HTC should cut half its staff, just to break even on its smartphone business. Google`s last big foray into mobile phone manufacturing — its acquisition of Motorola Mobility — ended in a big loss for Google.
0 comments:
Post a Comment