Google signs $1.1bn HTC smartphone deal

A report says Google is close to buying a stake in Taiwan-based smartphone maker HTC whose logo is displayed at the 2017 Mobile World Congress

The Taiwan stock exchange said on Wednesday that HTC shares will be halted from 21 September on a pending news announcement. HTC's official response has simply been that they do not "comment on market rumor or speculation".

As the negotiations were said to be close to being finished, one would expect some additional information around this time, right?

HTC is already a partner of the California giant and has produced the Google-branded Pixel smartphone, an upgrade of which is set to be released next month. HTC will also continue to work on Vive VR, Internet of Things, augmented reality and artificial intelligence, all of which will remain independent to the Google deal.

As some of you may remember, Google had purchased Motorola Mobility six years back with similar intentions six years back in a huge $12.5 billion deal. The statement also fails to mention whether HTC will now be the exclusive manufacturer of Pixel phones.

Google and HTC have been working together for a decade, including on the first smartphone to use the Android operating system.

A range of HTC employees will join Google under a US$1.1 billion (AUD$1.4 billion) deal by the search leviathan to boost its hardware development efforts.

So why might Google be interested in buying another smartphone maker now? By previous year that share had plummeted to less than 1%, or 12.8 million phones, Counterpoint data show. But the company has seen its worldwide market share wane in recent years as Samsung and Apple dominated the high end of the market, while several Chinese vendors have gained ground in the budget market with less expensive handsets. It's no secret that such talent will be used for future "Made by Google" hardware, which includes not just Pixel phones but Chromecasts and smart speakers too. First as a contract manufacturer (Sony Ericsson Xperia X1, Nexus One, T-Mobile G1) and then as a brand name manufacturer (HTC Touch Pro, HTC Touch Diamond, HTC Touch Pro2, HTC Touch Diamond2, HTC One M8), HTC had made a name for itself.

We've been saying that HTC may sell off parts of or the whole business. Two years later, it offloaded the company to Lenovo. Android dominates so completely that even if, say, LG feels threatened by Google's hardware aggression, it has virtually no recourse. Evercore worked with HTC as financial advisor, while Lazard advised Google. Together, they created the first ever Android smartphone, the HTC Dream.