Google takes $1.1bn chomp out of HTC, smacks lips, burps

Some 2,000 bods to shift over in talent pump 'n' dump

Google has formally completed its $1.1bn (£780m) takeover of a chunk of HTC, under which some 2,000 staff will transfer to work on the chocolate factory's Pixel phone.

In a blog post, Rick Osterloh, senior hardware veep at the megacorp, said "building hardware is... hard," adding: "That's why I'm delighted that we've officially closed our deal with HTC."

"These new colleagues bring decades of experience achieving a series of 'firsts' particularly in the smartphone industry – including bringing to market the first 3G smartphone in 2005, the first touch-centric phone in 2007, and the first all-metal unibody phone in 2013. This is also the same team we've been working closely with on the development of the Pixel and Pixel 2."

Under the deal, Google will also receive a non-exclusive licence for HTC intellectual property. The Taiwanese smartphone giant has fallen from grace over the last 10 years – mainly due to its failure to produce a broad competitive portfolio against the likes of Samsung.

The company's share price has plummeted 90 per cent since 2011 alongside consecutive net losses.

Revenues for 2016 plunged 36 per cent NT$78.2bn (£1.9bn), compared with NT$121bn (£2.9bn) in 2015, with gross profit tumbling 57 per cent to NT$9.4bn ($228m). However, net losses improved slightly, down 32 per cent to NT$10.5bn (£255m).

Back in 2011, HTC had a 10.7 per cent market share. Now it has just 0.6 per cent, according to figures from TrendForce.

HTC has insisted it will still have "excellent R&D personnel to develop their own brand of smartphones". Its annual report said HTC employed 10,652 worldwide as of March 31, 2017.

Google hopes the deal will bolster its AI, software and hardware forays as well as expand its footprint in the Asia Pacific region – where the HTC personnel are mainly based.

However, the deal does have echoes of Google's ill-fated $12.5bn (£8.8bn) acquisition of Motorola Mobility in 2012, which it later offloaded to Lenovo for a mere $2.91bn (£2bn). Not to mention Microsoft's disastrous purchase of Nokia's phone biz for $7.2bn (£5.1bn) in 2013. ®

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