Google acquires some HTC engineers for $1.1 billion, hopes to make best Pixel phone in the world

Google is buying part of HTC, or more specifically the HTC team that collaborated with Google on creating the Pixel phones. Last year HTC helped Google make the Pixel and Pixel Xl phones while this year the company has reportedly helped the company create the Pixel 2. Google said that its deal with HTC was more of talent acquisition, although this one is a pretty expensive people hiring considering Google is paying $1.1 billion to HTC for it. The deal comes hours after HTC announced that it is set to halt trading of its shares on Wednesday.

Apart from acquiring a set of engineers and resources that HTC anyways devoted to Pixel phones, Google will also acquire non-exclusive rights to some HTC intellectual property. This seemingly refers to the technologies that are already inside the HTC phones and will probably end up in Google Pixel phones. One example will be the "squeezable frame" that HTC has inside the U11 and that Google is also reportedly putting in the Pixel 2 and the Pixel 2 XL. Then there are technologies like BoomSound speakers and the Ultrapixel cameras, which are common in the HTC phones but in future may make their way to the Google Pixel phones.

Interestingly, the deal doesn't mean HTC will stop making phones. Even as the company informed the world of its deal with Google, HTC also noted that it would continue to make smartphones. In fact, it said that a new flagship phone -- possibly based on updated hardware for the U11 smartphone -- was in the works and would be launched before the end of the year. Apart from phones, HTC is also heavily invested in making virtual reality headsets. It makes the Vive VR headset and the company will also continue to work on that. 

As part of the deal, Google has signed an agreement with HTC, especially to make more exciting products in the coming 20 years or so. "This agreement is a testament to the decade-long history of teamwork between HTC and Google," notes Rick Osterloh, Senior Vice President, Hardware, Google in a blog post.

Commenting on the acquisition Rick Osterloh notes, "We're excited about the 2017 lineup, but even more inspired by what's in store over the next five, 10, even 20 years. That's why we've signed an agreement with HTC, a leader in consumer electronics that will fuel even more product innovation in the years ahead."

With this agreement, Google will get certain HTC employees, many of whom are already working with Google to develop future Pixel smartphones. To recall, last year's Google Pixel phones -- Pixel and Pixel XL was manufacturers by HTC -- and there's no doubt that the phones were perfect from almost all aspects, especially in the imaging department. Google is all set to announce the successors of the last year's Pixel phones aka Pixel 2, Pixel 2 XL on Oct 4.

"In many ways, this agreement is a testament to the decade-long history of teamwork between HTC and Google. 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," says Cher Wang, Chairwoman, and CEO of HTC.

With this agreement, Google confirmed that a team of HTC's talent will join Google as part of their hardware department. "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. The deal also includes a non-exclusive license for HTC intellectual property," notes Rick Osterloh.

To recall, HTC and Google together have achieved several milestones in the past days. "We've achieved several mobile-industry firsts, including the first ever Android smartphone, the HTC Dream, also known as the T-Mobile G1 (I loved mine!); as well as the Nexus One in 2010, the Nexus 9 tablet in 2014, and the first Pixel smartphone just last year."

He further notes, "HTC has been a longtime partner and has created some of the most beautiful, high-end devices on the market. We can't wait to welcome members of the HTC team to join us on this journey."

But acquiring HTC's Pixel team members, Google is basically looking forward to expanding its hardware business, which as the company says, "is still early days for Google's hardware business."

"We're focused on building our core capabilities while creating a portfolio of products that offers people a unique yet delightful experience only made possible by bringing together the best of Google software-like the Google Assistant-with thoughtfully designed hardware," writes Rick Osterloh.

This is for the second time that Google has made such a big purchase involving a smartphone manufacturer. About six years ago, Google announced a $12.5 billion deal to buy Motorola Mobility. However, that deal was driven more with an idea to acquire patents. Google and its hardware partners were in an almost existential crisis at that time with Apple going to a war in courts using its patents. Google needed something to fire back and that led to the company acquiring Motorola. A few years later, Google sold the Motorola division to Lenovo.