Google Inks $1.1bn Smartphone Deal with Taiwan's HTC

Google has broadened its smartphone manufacturing operations with an agreement to pay $1.1bn to transfer about 2,000 staff from Taiwanese smartphone maker HTC, reported Financial Times.

The companies have also inked a separate non-exclusive licence agreement for HTC's intellectual property, the terms of which have not been disclosed. "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," said Cher Wang, HTC co-founder and chair.

The purchase highlights the growing importance of hardware to Google as it seeks to entrench its advertising and internet services, particularly in the high end of the smartphone market, while also laying the ground for wider use of its artificial intelligence. Google created its own hardware division last year and launched the Pixel, the first smartphone to feature only the Google brand and to be designed in-house. It hired HTC as the contract manufacturer for the phone, extending a close handset partnership that dates to 2008 to the first device to carry Google's Android operating system.

Google said many of the HTC employees who will be involved are "already working with Google to develop Pixel smartphones". The purchase will reinforce Google's manufacturing capabilities for future handsets and make it less reliant on the struggling Taiwanese manufacturer, according to analysts. "They are buying a future for Pixel, if you assume HTC wouldn't go on much longer on its own," said Carolina Milanesi, an analyst at Creative Strategies.

Boosting smartphone manufacturing could also provide a stronger hedge against Google's heavy reliance on...